REFUTATION, 


fi  Y    HIS    FRIENDS,     * 


THE  CALUMNIES  AGAINST 


DAVID   HEN  SHAW, 


RELATION  tO  }M1S  FAILURE  OF  THfi  COMMONWEALTH  BAM, 


AND  TUB 


0#  SOUTH  BOSTON  LANDS  TO  TrfE  UNITED 


B  0  S  t  0  Ni 
BY    B  fi  A  L  S    & 

WATER    STREET, 

1844, 


REFUTATION. 


THE  recent  rejection,  by  the  Senate  of  the  United  States,  of  the  nomination  of 
David  Henshaw,  as  Secretary  of  the  Navy,  has  been  followed  by  reiterated  news- 
paper assertions,  that  among  the  reasons  for  this  action  of  the  Senate  was  "his  par- 
ticipation in  the  alleged  fraud  in  the  Commonwealth  Bank  transaction,  by  which  the 
government  was  cheated  out  of  a  large  sum  of  money,  in  taking  South  Boston  lands 
in  payment  of  a  debt." 

In  the  exercise  of  an  independent  discretion,  in  confirming  or  rejecting  any  nomi- 
nation submitted  to  them,  the  Senate  of  the  United  States  may  rightfully  stand  above 
all  question  in  every  matter  affecting  the  political  relations  and  personal  qualifica- 
tions of  the  party,  aside  from  individual  character  and  integrity.  But  if  they  assume 
to  reject  a  nominee  upon  these  last  grounds,  they  virtually  assume  as  high  a  respon- 
sibility as  if  acting  under  their  judicial  power  of  impeachment,  and  their  decision,  in 
such  case,  should  be  warranted,  not  by  charges  or  suspicion  merely,  but  by  substan- 
tial proofs.  And  in  the  exercise  of  this  high  duly  imposed  by  the  constitution,  the 
judgment  and  conviction  of  each  Senator,  and  not  the  direction  of  an  organization 
separate  from  the  official  action  required  of  him,  ought,  it  is  conceived,  to  determine 
that  action,  when  applied  to  the  rejection  of  any  nominee,  upon  grounds  affecting  his 
personal  integrity  or  moral  character/  The  fact  that  in  this  case,  the  Senate  instituted 
no  investigation,  preferred  no  charges,  and  heard  no  evidence,  is  sufficient  proof  that 
the  alleged  reasons  of  rejection  are  not  the  true  ones  ;  though  the  bold  and  reiterated 
assertions  of  newspapers  hostile  to  Mr.  Henshaw,  and  which  have  been  suffered  to 
pass  without  reply,  may  not  have  been  without  their  influence,  in  producing  false 
impressions. 

Knowing  that  the  senators,  who  Voted  against  Mr.  Henshaw,  did  riot  enter 
officially  into1  any  investigation  of  the  calumnies  affecting  his  personal  integrity,  and 
that  therefore  they  must  be  ignorant  of  the  conclusive  answer  which  facts  a'nd  docu- 
ments can  give  to  every  one  of  them  in  detail,  and  to  all  in  the  a'ggregate ;  we  have 
too  much  respect  for  them  as  honorable  and  high-minded  men,  to  believe  that  they 
passed  uptfn  the  character  of  any  man,  without  giving  him  a  hearing ;  and  therefore 
we  do  riot  believe  that  Mr^  Henshaw  was  rejected  upon  any  other  than  political  and 
party  considerations. 

With  these  we  have  no  concern,  and  have  nothing  to  say  in  censure  on  the  one 
hand  or  extenuation  oil  t'fi6  other. 

We  take  issue  only  with  the  assumed  fact  that  the'  reason,  or  any  part  of  the 
reason  for  the  rejection  of  Mr.  Henshaw  was  rightfully  founded,  if  at  all,  upon  alleged 
fraudulent,  dishonest  or  dishonorable  transactions  on  his  part,  in  his  former  relations 
to  the  l/nifed!  States  a's  a  pu'blic  officer,  or  in  his  private  acts  as  a'  man. 

In  this  respect,  the  action  of  the  Senate  is  taken  and  attempted  to  be  pressed  upon' 
the  public,  as  a  solemn  verdict  against  Mr.  Henshaw ;  and  though  similar  accusations 
were  met  and  put  down,  personally  and  through  an  investigation  of  the  Department, 
five  years  ago,  yet  in  this  new  aspect  of  an  assumed  expression  of  the  Senate,  it  is* 
«Seemed  proper  by  the  friends  of  Mr.  Henshaw  to'  collect  the  abimdalit  evidence" 


of  his  justification,  in  form,  and  to  distinctly  meet  the  issue  as  it  stands  ;  not  for  him 
alone,  but  also  for  the  many  men,  of  heretofore  unimpeached  integrity,  who,  if  he 
were  guilty  of  the  alleged  frauds,  were  principals  or  accessories  with  him,  in  every 
act,  and  who,  if  he  is  to  be  condemned  by  the  supposed  ex  parte  judgment  of  the 
Senate,  must  be  equally  condemned  with  him. 

Upon  what  that  judgment  was  founded,  has  not  yet  transpired.  The  executive 
sessions  of  the  Senate  are  held  with  closed  doors,  and  the  injunction  of  secrecy  can 
be  removed  only  by  that  body.  They  have  done  so,  as  to  the  yeas  and  nays  upon 
the  nomination,  but  not  as  to  the  debates  and  the  alleged  grounds  of  the  rejection. 
On  the  14th  of  February,  Mr.  Hen.-haw  presented  to  the  Senate,  through  its  Presi- 
dent, Mr.  Mangum,  the  following  Memorial,  which  will  sufficiently  evince  his  desire 
and  readiness  to  openly  meet  any  charges  that  may  have  been  privately  preferred 
against  him. 

MEMORIAL  OF  DAVID   HENSHAW. 

"  To  the  Honorable  the  Senate  of  the  United  States : 

"  The  undersigned  most  respectfully  requests  the  Senate  of  the  United  States  to 
"  remove  the  injunction  of  secrecy  from  their  proceedings  relative  to  his  nomination 
"  to  the  office  of  Secretary  of  the  Navy,  recently  acted  on  by  your  honorable  body. 

"  Reports  have  been  circulated,  he  presumes  not  on  the  authority  of  any  senator, 
"  and  widely  spread  through  the  public  press,  that  charges  derogatory  of  the  personal 
"  integrity  and  moral  character  of  the  undersigned  were  presented  to  the  Senate  or 
"  to  senators,  and  that  some  if  not  all  those  charges  are  now  on  file  in  the  archives 
"  of  the  Senate.  The  undersigned  desires  to  meet  those  charges,  if  any  such  there  are, 
"  and  challenges  their  exhibition.  It  is  not  to  be  presumed  that  any  honest  man,  what- 
"  ever  his  station,  would  prefer  charges  against  any  individual,  the  responsibility  of 
"  which  he  would  hesitate  to  assume  in  the  broad  face  of  day.  The  undersigned  can- 
"  not  persuade  himself  that  your  honorable  body  will  permit  the  character  of  an  Amer- 
"  ican  citizen  to  be  thus  assailed  in  the  dark,  or  charges  thus  made  against  him  to  be 
"  shown  only  in  a  distorted  or  perverted  form  ;  he  therefore  trusts  that  this,  his  appeal 
"  to  the  high  sense  of  honor  which  he  hopes  pervades  the  Senate,  to  be  furnished  with 
"  copies  of  all  charges,  if  any,  against  his  character,  and  with  the  names  of  those  who 
"  made  them,  will  not  be  in  vain.  And  he  is  ready  now,  and  will  be  ready  at  all 
"  times,  to  repel  and  refute  any  and  every  such  charge  by  whomsoever  made* 

"DAVID  HENSHAW." 

"  February  14,  1844." 

No  action  is  as  yet  known  to  have  taken  place  upon  this  Memorial ;  and  in  the 
mean  time  the  false  construction  put  upon  the  decision  of  that  body,  is  attempted  to 
be  fastened  upon  the  public  mind  as  the  true  one.  We  will  only  add  on  this  point, 
that  the  pretence  of  evasion  of  inquiry  on  the  part  of  Mr.  Henshaw,  is  thus  put  at 
rest ;  and  further,  that  if  the  majority  of  the  Senate  rejected  Mr.  Henshaw  upon 
any  charges  affecting  his  moral  character,  they  are  bound,  as  honorable  men,  to  tell 
him  what  they  were ;  or  if  they  rejected  him  on  other  grounds,  and  with  no  refer- 
ence to  any  such  charges,  they  are  equally  bound,  as  honorable  men,  to  say  so. 

While  the  nomination  of  Mr.  Henshaw  was  pending  before  the  Senate,  neither  he 
nor  his  friends  deemed  it  fitting  to  enter  into  a  newspaper  controversy  in  his  personal 
vindication.  The  press  has  consequently  taken  its  full  license  in  assailing  him,  and 
finding  its  first  falsehoods  uncontradicted,  has  grown  more  and  more  reckless  in 
the  invention  of  new  ones,  until  the  silence  of  conscious  rectitude  on  his  part,  has 
been  construed  into  acquiescence  in  a  sentence  of  condemnation.  His  official  rela- 
tion to  the  government  having  now  ceased,  and  a  distinct  call  having  been  made 
upon  the  Senate  for  a  full  disclosure  of  all  matters  concerning  him,  that  may  have 
transpired  before  that  body,  his  friends  feel  that  they  are  fully  at  liberty  to  examine 
the  allegations  and  calumnies,  as  far  as  known  or  insinuated,  which  either  officially  or 
unofficially,  openly  or  secretly,  have  been  preferred  against  him.  And  this  refutation 
is,  as  its  title  imports,  not  the  production  of  Mr.  Henshaw,  who  has  not  Written  a  line 
of  it,  but  of  his  friends,  with  his  sanction  and  approval  of  the  facts  it  contains. 


5 

The  charges  all  fall  under  two  general  classifications ;  first,  as  to  the  failure  of  the 
Commonwealth  Bank,  in  1838,  and,  second,  the  transfer  of  lands  in  South  Boston  to 
the  United  States,  in  part  payment  of  a  debt  from  the  Bank  to  the  United  States. 
In  this  inquiry  the  concerns  or  conduct  of  the  Commonwealth  Bank  have  no 
bearing,  except  in  their  alleged  connexion  with' Mr.  Henshaw.  He  was  at  no  time 
during  its  existence,  either  president,  director,  or  officer  of  the  Bank.  The  first 
directors  chosen  in  1824,  when  the  Bank  went  into  operation,  were  Messrs.  John  K. 
Simpson,  Hall  J.  How,  William  Freeman,  and  John  Henshaw  in  1825.  Messrs, 
William  Parmenter  and  Adams  Bailey  were  chosen  directors  in  1826 ;  Samuel  S. 
Lewis  became  a  director  in  1827  ;  Charles  Hood,  in  1829 ;  Oliver  Fletcher,  in  1830  ; 
F.  S.  Carruth,  in  1832;  and  Messrs.  Otis  Rich  and  John  Mills,  in  1835.  Mr.  Par- 
menter retired  from  the  direction  in  1831 ;  Mr.  John  Henshaw,  in  1836 ;  Mr.  Bailey 
and  Mr.  Lewis,  in  1837.  Messrs,  Carruth,  Fletcher,  Freeman,  How,  Mills,  Park  and 
Hood,  were  the  directors  when  the  Bank  failed ;  Mr.  Simpson,  the  president,  who 
had  held  that  office  since  1832,  having  deceased  a  short  time  before  the  failure. 

At  the  time  of  the  failure  of  the  Commonwealth  Bank,  David  Henshaw  was  not 
indebted  to  the  Bank,  a  dollar.  He  was  endorser  or  surety  to  a  large  amount  on 
negotiated  paper,  not  then  due,  every  dollar  of  which  was  fully  paid ;  and  in  this 
connexion  one  prominent  fact  should  be  stated,  viz.,  that  the  Bank  or  its  creditors 
never  lost  a  cent  by  Mr.  Henshaw,  nor  by  any  relative,  or  connexion,  or  agent  of  his, 
in  any  form.  The  large  debt  of  John  Henshaw,  amounting  to  some  $80,000,  and 
which  occurred  in  the  course  of  regular  business  transactions,  was  met,  and  paid; 
principal  and  interest,  in  specie  funds,  without  diminution  or  depreciation. 

There  is,  consequently,  no  pretext  (aside  from  the  relations  of  the  Warren  Associ- 
ation to  the  Bank)  that  David  Henshaw,  or  any  persons,  under,  through,  or  by  him; 
were  benefitted  or  relieved  in  any  respect,  by  any  arrangement  preceding,  at  the  time 
of,  or  subsequent  to  the  failure  of  the  Bank. 

With  this  fact  established,  it  must  be  assumed  that  if  Mr.  Henshaw  was  conusant 
of,  or  accessory  to,  any  fraudulent  transaction  on  the  part  of  the  Bank,  it  was  without 
any  possible  pecuniary  benefit  or  relief  to  himself,  or  those  for  whom  he  was  in  any 
manner  responsible  ;  which  is,  in  substance,  to  charge  a  man,  not  deficient  in  sagacity, 
with  fraud  and  crime  without  motive ;  a  charge  always  so  improbable,  under  any 
circumstances,  as  to  demand  strong  and  positive  proof,  before  it  can  be  entitled  to 
credence. 

So  far  from  gaining  by  the  failure  of  the  Bank,  Mr.  Henshaw  was  a  direct  loser* 
to  the  amount  of  some  $14,000,  in  shares  he  held  in  the  Bank  and  its  appendage  the 
Commonwealth  Insurance  Company.  Whatever  previous  knowledge,  therefore,  it 
may  be  assumed  he  had,  that  the  Bank  was  about  to  fail,  it  is  certain  that  he  secured 
nothing  to  himself  by  it,  but  was  a  sufferer  to  the  amount  stated.  And  this  fact  of 
itself,  in  the  absence  of  positive  proof  of  previous  knowledge,  negatives  the  assump- 
tion. Thus  much  for  his  private  and  personal  relation  to  the  Commonwealth  Bank; 

In  his  official  capacity  as  Collector  of  Customs,  he  had  in  the 
Bank,  at  the  time  of  its  failure,  a  general  deposit  placed 
to  his  credit,  of  -----  -  $65,941  77 

Special  deposit  in  specie,      -  ...  10,028  70 

A  balance  of  Treasury  Notes,  of    '  -  43,350  00 

$119,320  47 

The  special  deposit  in  specie,  was  removed  from  the  Bank  about  one  o'clock,  on 
the  llth  of  January,  1838,  the  day  the  Bank  failed,  and  the  balance  of  Treasury 
notes  was  withdrawn  at  two  o'clock  the  same  day.  This  appears  from  the  statei 
merits  of  Thomas  W.  Colburn,  Peter  Dunbar,  William  A.  Wellman,  and  Adams 
Bailey.  [See  Appendix  No.  1.]  The  withdrawal  of  these  two  items  of  deposit 
could  have  no  connexion  with  any  anticipated  failure  of  the  Bank,  because,  as 
special  deposits,  they  could  not  be  appropriated  by  the  Bank  or  its  creditors,  and 
couUl  be  withdrawn  as  well  after  as  before  the  closing  of  its  doors. 

Aside  from  these  specific  items,  the  official  relation  of  Mr.  Henshaw  to  the  Bank, 
left  standing  to  his  credit,  as  Collector,  upon  its  books,  at  the  time  of  the  failure,  on 


the  llth  of  January,  1838,  the  sum  of  865,941  77  belonging  to  the  United  States, 
and  every  dollar  of  this  had  been  deposited  by  and  under  authority  of  the  department* 
and,  as  will  subsequently  be  seen,  was  repaid  to  the  United  States,  upon  a  judgment 
against  the  Bank.  In  neither  capacity  therefore,  as  a  private  debtor  to  the  Bank, 
whether  as  principal  or  surety,  nor  as  Collector,  did  the  Bank  or  the  United 
States  (aside  from  the  Warren  Association,  which  will  hereafter  be  considered,) 
lose  a  dollar  by  Mr.  Henshaw,  or  his  relations,  or  by  any  person  for  whom  he  was 
responsible. 

The  only  charge  in  this  connexion,  is,  that  Mr.  Henshaw  knew  that  the  Bank 
was  about  to  fail  the  evening  before  it  closed  its  doors,  and  that  he  availed  himself  of 
this  knowledge  to  call  in  his  specie  checks  given  out  as  Collector,  and  paid  them  in 
bills  of  the  Commonwealth  Bank;  but  this  allegation  will  be  shown,  on  examination, 
to  be  wholly  unfounded  in  fact. 

The  concerns  of  the  Commonwealth  Bank  were  investigated  by  a  committee  of  the 
Legislature  of  Massachusetts,  in  January,  1838,  immediately  upon  the  failure  of  the 
Bank.  It  was  a  period  of  great  and  feverish  excitement,  and  of  active  suspicion  in 
the  public  mind,  with  a  strong  political  bias  to  make  the  Commonwealth  Bank  the 
scape-goat ;  and  an  investigation  and  report,  made  under  such  circumstances,  were 
greatly  liable  to  error.  But  taking  that  report  as  it  is,  with  the  corrections  of  the 
testimony  made  by  the  witnesses  themselves,  and  let  it  have  its  full  weight  as  to  the 
point  we  are  now  considering,  viz.,  the  alleged  previous  knowledge  Mr,  Henshaw 
had  of  the  failure  of  the  Bank,  and  what  is  the  fair  conclusion  ?  It  neither  asserts 
or  proves  a  particle  affecting  David  Henshaw. 

The  report  affirms  (page  15  of  Senate  document  No.  35,  for  1S38)  that  "  it 
appears  to  the  committee  that  the  concerns  of  the  Bank,  for  a  considerable  periodr 
have  been  left  very  much  to  the  management  of  its  late  President,  John  K.  Simpson, 
its  Cashier,  Charles  Hood,  and  Hall  J.  How,  one  of  its  directors ;  while  loans  have 
also  been  freely  granted  to  some  of  the  other  directors." 

The  report  further  says,  that  "  when  the  directors  first  knew  that  they  must 
suspend  their  operations,  is  unknown  to  the  committee ;  but  probably  the  large 
majority  of  them  were  ignorant  of  their  near  approach  to  the  cataract,  nor  were 
sensible  of  the  strength  of  the  current  that  was  sweeping  them  along.  A  meeting  of 
a  few  of  the  directors  and  their  friends  was  held  in  the  evening  of  the  10th  of 
January,  when,  no  plan  for  relief  being  suggested,  it  became  necessary,  at  the  termina- 
tion of  business  on  the  llth  of  January,  to  close  the  doors  of  the  Bank." 

It  is  here  admitted  by  the  committee,  that  even  a  large  majority  of  the  directors, 
did  not  previously  know  or  anticipate  the  failure  of  the  Bank,  and  there  is  no~ 
intimation  in  the  report  that  Mr.  Henshaw  had  any  better  knowledge  of  the  crisis 
before  it  happened.  An  attempt,  aside  from  the  report,  has  been  made  to  distort  the 
testimony  before  the  committee,  of  Mr.  Hall  J.  How,  into  an  inference  of  knowledge 
on  the  part  of  Mr.  Henshaw,  the  evening  previous  to  the  failure.  In  the  minutes 
taken  before  the  committee,  Mr.  How  is  represented  as  making  the  following  state- 
ment of  a  meeting  at  the  house  of  Mr.  John  Henshaw,  on  the  evening  of  the  10th  of 
January. 

"  Hall  J.  How.  There  was  a  meeting  at  Mr.  John  Henshaw's,  on  "Wednesday 
evening  before  the  Commonwealth  Bank  failed.  The  Cashier  was  present, 
John  Henshaw,  David  Henshaw,  Charles  Henshaw,  and  myself.  I  was  invited 
there  by  John  Henshaw.  I  was  not  told  what  the  object  was.  The  general  con- 
versation was  about  the  state  of  the  Bank.  Mr.  David  Henshaw  inquired  if  the 
Bank  had  been  hard  pressed.  Mr.  Hood  said  he  had  been  a  good  deal  pressed.. 
and  if  the  bills  pressed  home  hard,  it  would  plague  him  to  meet  them.  They 
talked  of  trying  to  get  help  from  the  other  banks.  Mr.  Hood  said  it  was  diffi- 
cult. I  think  he  said  to  David  Henshaw,  that  he  had  applied  to  Mr.  Stone,  the 
president  of  the  Suffolk  Bank,  for  assistance.  Hood  said  Stone  had  declined  to 
help  him.  It  was  mentioned  by  Hood,  that  if  the  bills  pressed  home  hard,  and  he 
could  not  get  help,  he  could  not  meet  them.  David  Henshaw  said,  'you  must  stir 
your  stumps,'  There  was  some  talk  about  the  government  money;  but  I  do  no% 


"  recollect  what  it  was.  D.  Henshatv  seemed  to  express  a  good  deal  of  surprise  at 
"  the  Cashier's  statement.  I  do  not  recollect  that  the  Warren  Association  was 
"  named.  It  was  agreed,  unless  we  could  get  help,  it  would  be  impossible  for  us  to 
"  meet  the  bills  or  balances.  It  ivas  finally  understood  that  we  must  stop." 

The  latter  part  of  this  statement,  as  taken  before  the  committee,  on  the  6th  of 
February,  1838,  was  disclaimed  by  the  witness,  Mr.  How,  in  a  note  of  February 
16,  1838,  as  soon  as  his  attention  was  called  to  it.  He  there  says,  that  the  report  of 
his  testimony  is  inaccurate  in  some  particulars, — that  he  had  no  recollection  of  read- 
ing the  minutes  taken  by  the  committee,  or  hearing  them  read ;  and  adds,  "  I  think 
"  I  could  not  have  stated  that  it  Avas  agreed  and  finally  understood  that  the  Bank 
"  must  stop.  It  was  only  understood  that  the  Bank  must  stop  in  case  it  ivas  pressed 
"  to  pay  its  bills  and  balances,  and  could  not  obtain  assistance." 

This  explanation,  published  in  1838,  has  never  been  contradicted.  Mr.  John 
Henshaw,  one  of  the  parties  present  at  that  meeting,  also  stated  on  the  16th  of  Feb- 
ruary, 1838,  that  "  from  the  tenor  of  the  conversation,  I  apprehended  no  immediate 
"  danger  to  the  Bank,  and  when  the  conversation  ceased  upon  that  subject,  I  sup- 
"  posed  the  Bank  would  make  an  effort  to  raise  the  requisite  means  from  its 
"  resources." 

Taking  this  evidence  together,  (and  it  is  the  whole  on  this  point,)  it  appears,  that 
so  far  from  anticipating  the  embarrassment  of  the  Bank,  David  Henshaw  expressed 
a  good  deal  of  surprise  at  the  Cashier's  statement ;  that  he  urged  active  exertion  to 
meet  the  difficulties,  and  that  there  was  no  understanding  then  that  the  Bank  was 
to  stop,  except  in  the  alternative  that  it  was  pressed  to  pay  its  bills  and  balances, 
and  could  not  obtain  assistance ;  and  at  that  time  of  general  suspension  and  want 
of  confidence,  the  same  might  have  been  said  of  almost  every  bank  in  the  Com-, 
mon  wealth. 

A  further  attempt  was  made  to  bring  home  to  Mr.  Henshaw  a  previous  knowledge 
of  the  failure  of  the  Bank,  through  the  alleged  testimony  of  Mr.  Albert  Fitz,  the 
discount  clerk.  At  the  time  of  the  investigation,  before  the  committee  of  the  Legis- 
lature, the  Boston  Atlas,  in  its  pretended  report  of  the  testimony,  made  Mr.  Fitz 
say,  that  "  the  specie  deposit  of  the  Collector,  $60,028  70,  was  drawn  out  by  him 
the  middle  of  the  forenoon  on  the  llth  of  January."  No  such  testimony  of  Mr. 
Fitz  appeared  in  the  evidence  reported  by  the  committee  of  the  Legislature,  and  in  a 
note,  published  the  16th .  of  February,  1838,  Mr.  Fitz  himself  declares,  "  J  gave  na 
suck  testimony."  The  printed  minutes  of  the  evidence,  appended  to  the  report  of  the 
committee,  made  Mr.  T.  W.  Colburn  say,  that  "  the  specie  deposit  of  the  Collector, 
$10,028  70,  was  drawn  out  by  him  about  the  middle  of  the  forenoon  of  llth  of 
January  ;"  but  Mr.  Colburn,  in  a  note  of  February  16, 1838,  then  published,  affirmed 
that,  so  far  as  he  could  recollect,  it  was  bettoeen  the  hours  of  tioelve  and  one,  and  that 
his  testimony  was  taken  verbally  by  the  committee,  and  was  not  read  over  to  him. 
And  in  point  of  fact,  from  the  most  conclusive  testimony,  the  actual  time  of  the 
withdrawal  of  the  specie  deposit  is  proved  to  have  been  between  one  and  two 
o'clock,  of  the  llth  of  January,  and  the  balance  of  Treasury  notes  was  drawn  out 
at  two  o'clock  the  same  day.  [See  Appendix  No.  1.] 

The  only  other,  and  the  main  fact  relied  on,  to  prove  the  assertion  that  Mr.  Hen-. 
show  knew  of  the  anticipated  failure  of  the  Bank,  is  the  publication  of  the  follow- 
ing notice  in  the  Morning  Post  of  Thursday  morning,  the  llth  of  January,  1838, 
the  day  of  the  failure  : 

"  Notice. — Persons  holding  checks  against  the  Custom  House,  are  requested  to 
present  them  either  at  the  Bank  or  at  this  office,  for  payment,  immediately. 

DAVID  HENSHAW,  Collector." 

The  inference  attempted  to  be  drawn  from  this  notice  is,  that  Mr.  Henshaw, 
knowing  the  Bank  was  about  to  fail,  called  in  these  checks  for  the  purpose  of  having 
them  paid  off  in  the  bills  of  the  Commonwealth  Bank  ;  and  upon  this  slight  pretext 
is  founded  the  newspaper  allegation  of  "  cheating  the  poor  fishermen,  by  palming  off 
upon  them  the  bills  of  a  broken  bank." 

But  the  whole  allegation  fail?,  from  the  single  fact  that  these  "  specie  checks  " 


8 

neVer  went  to  the  fishermen,  and  no  fisherman  ever  had  one  of  them.*  '.they  were 
issued  for  debentures,  (that  is,  for  refunded  duties  or  drawbacks  on  the  exportation 
of  imported  goods,)  were  due  and  payable  in  specie,  and  though  nominally  payable 
at  the  Commonwealth  Bank,  they  were  well  known  to  be  payable  at  the  Custom 
House  in  specie,  whenever  demanded.  In  point  of  fact,  not  one  of  these  checks  was 
ever  presented  at  the  Bank,  in  consequence  of  the  above  published  notice,  but  they 
all  came  to  the  Collector's  office,  and  were  there  settled  in  specie.  Mr.  Henshaw 
was  just  retiring  from  the  office,  and  the  return  of  the  specie  checks  was  necessary,  to 
enable  him  to  close  his  accounts,  and  hand  the  business  over  to  his  successor. 

Upon  the  face  of  this  allegation  appears  the  utter  inadequacy  of  motive  for  such  a 
proceeding.  Mr.  Henshaw,  as  Collector,  could  derive  no  possible  benefit  from  pay- 
ing the  Collector's  checks  in  the  bills  of  the  Bank.  The  deposits  to  his  credit  in  the 
Bank,  as  Collector,  as  will  be  proved  hereafter,  were  not  made  by  him,  but  passed  to 
his  credit  after  the  suspension  of  specie  payments,  by  direction  of  the  Secretary  of 
the  Treasury.  If  his  checks,  which  it  was  optional  with  the  creditors  of  the  United 
States  to  take  or  not,were  paid  by  the  Bank  in  its  bills,  the  amount  so  paid  would  bei 
charged  against  his  deposit,  and  could  avail  him  nothing.  It  must  therefore  have  been 
a  gratuitous  and  uncalled  for  proceeding  on  his  part,  to  *  cheat  the  poor  fishermen,"  or 
the  holders  of  his  checks,  for  the  sole  and  exclusive  benefit  of  the  United  States,  and 
that  too,  to  merely  the  extent  of  the  discount  upon  the  inconsiderable  amount  which 
it  was  likely  this  notice  would  call  in  during  the  banking  hours  of  the  llth  of  Janu- 
ary, on  which  day,  and  on  the  evening  before,  it  is  assumed,  in  order  to  carry  out  this 
charge,  that  he  knew  the  Bank  would  fail !  As  Mr.  Henshaw  himself  said,  in  his 
notice  of  this  assertion,  in  1838,-^-"  the  improbability  that  any  man  of  common  sense 
"  would  attempt  to  cheat  the  poor  fishermen  for  the  sole  and  exclusive  benefit  of  the 
"  United  States'  Treasury,  is  so  strong,  that  this  charge  could  gain  little  belief  from 
"  an  intelligent  community." 

The  allegation,  however,  is  disproved,  not  merely  by  its  inherent  improbability,  but 
by  positive  evidence.  It  was  first  made  in  the  Boston  Atlas,  of  January,  1838.  and 
was  then  met  by  the  following  published  statement  and  evidence  ; 

David  Henshaw's  statement,  in  1838. 

"  The  first  that  1  knew  of  the  embarrassment  of  the  Bank,  wras  on  Wednesday 
"  night,  January  10th,  and  I  was  surprised  at  the  information.  I  had  been  for  some 
"  weeks  prior  to  the  8th,  confined  to  my  bed  by  sickness.  From  the  8th  to  the  time 
"  of  its  failure,  I  had  Treasury  notes  enough  in  the  Bank  to  meet  all  my  checks 
"  drawn  upon  it.  The  first  1  knew  that  the  Bank  would  stop,  was  near  one  o'clock, 
"P.  M.,  on  Thursday,  the  \\th.  The  advertisement,  calling  in  my  outstanding 
"checks,  which  appeared  on  the  llth  of  January,  and  about  which  so  many 
"unfounded  charges  and  unjust  imputations  have  been  made,  was  written,  on  the 
"  suggestion  of  William  A.  Wellman,  Esq.,  as  will  appear  by  his  letter  herewith 
"  given,  before  I  knew  that  the  Bank  was  embarrassed,  and  with  no  reference  what- 
"  ever  to  that  subject.  DAVID  HENSHAW." 

Mr.  Wellntan's  testimony,  in  1838. 

"Custom  House,  Boston,  Feb.  16,  1838. 

"  Your  note  of  this  date,  asking  me  to  state  '  under  what  circumstances,  on  whose 
1  suggestions,  and  at  what  time  the  advertisement  calling  in  the  outstanding  checks 
"  against  the  Custom  House,  was  Written  and  sent  to  the  printer,'  is  before  me.  In 
"reply,  I  have  to  state,  that  on  the  9th  of  January  last,  I  was  requested  by  you  to 
"  take  charge  temporarily  of  the  cash  affairs  of  this  office ;  that  on  the  morning  of 

*  Mr.  William  A.  Wellman.  the  temporary  Cashier,  and  now  an  officer  of  the  Customs,  thus 
described  these  checks,  in  a  statement  made  by  him  Feb.  16,  1838 : — 

"  Specie  checks,  so  called,  were  checks  drawn  by  the  Collector  on  the  bank,  but  received,  at  thg 
Option  of  the  holders,  in  payment  of  government  dues  at  the  Custom  House,  instead  of  specie. 
From  the  suspension  of  specie  payments,  in  May,  1837,  up  to  January  20th,  1838,  there  were 
issued  and  redeemed  nearly  eleven  hundred  thousand  dollars  in  amount  of  those  checks,  to  the 
very  great  convenience  of  the  mercantile  public." 


"  the  10th  of  January,  I  suggested  to  you  the  necessity  of  ceasing  to  issue  specie  checks, 
"  and  of  calling  in  those  outstanding,  to  enable  me  to  close  the  accounts  of  the  office  ; 
"  and  that  on  the  instant  of  the  suggestion,  you  did,  in  my  presence,  write  the  adver- 
"  tisement  referred  to,  and  called  for  the  messenger  to  take  it  to  the  printer." 

"WILLIAM   A.  WELLMAN, 

"  Late  temporary  Cashier  of  the  Boston  Custom  House" 
"  HON.  DAVID  HENSHAW, 

Late  Collector" 

Notwithstanding  this  express  testimony  of  Mr.  Wellman,  (who  was  of  opposite 
opinions  to  Mr.  Henshaw  in  politics,  and  has  since  held  the  office  of  Deputy  Collec- 
tor under  Hon.  Levi  Lincoln,)  the  publication  of  that  notice  has  continued  to  be 
cited  by  the  newspaper  calumniators  of  Mr.  Henshaw,  as  proof  of  his  intent  "  to  cheat 
the  fishermen,"  and  palm  off  the  bills  of  a  bank  he  knew  was  about  to  fail.  This 
single  fact  serves  to  show  with  what  pertinacity  refuted  falsehood  and  unfounded 
surmises  are  adhered  to  and  persisted  in,  to  give  color  to  charges  against  Mr.  Hen- 
shaw. 

Mr.  Wellman's  testimony  in  1838,  proved,  that  the  notice  was  written  and  sent  to 
the  paper,  at  his,  Mr.  Wellman's,  suggestion,  on  the  morning  of  the  10th  of  January. 
This  was  the  morning  of  the  day  upon  the  evening  of  which  day  the  meeting  was 
held  at  Mr.  John  Henshaw's  house,  at  which  last  time  any  knowledge  of  the  embar- 
rassment of  the  Bank  was  first  brought  home  to  David  Henshaw.  This  is  sufficient 
to  show  that  the  issuing  of  that  notice  could  have  had  no  possible  connexion  with  the 
failure  of  the  Bank.  But  there  were  other  reasons  for  its  publication,  which  Mr. 
Henshaw  withheld,  and  desired  Mr.  Wellman  to  withhold  at  the  time,  that  will  place 
this  matter  in  a  light  honorable  to  him  in  the  estimation  of  every  fair-minded  man. 

On  the  8th  and  9th  of  January,  1838,  a  deficiency  of  between  four  and  five  thousand 
dollars  was  discovered  in  the  accounts  of  the  then  Cashier  of  the  Custom  House.  The 
extent  of  the  defalcation  was  not  known.  Mr.  Henshaw  immediately  requested  Mr. 
Wellman  to  take  charge  of  the  cash  concerns  of  the  office,  and  ascertain  the  extent  of 
the  deficit.  In  the  business  of  the  office,  "  specie  checks,"  as  above  explained,  had 
been  drawn  by  the  Cashier  and  signed  by  the  Collector,  on  the  Bank,  from  the  period 
of  the  suspension  of  specie  payments,  in  May,  1837 ;  and  these  checks,  which  com- 
manded a  premium  over  current  bank  notes,  about  equal  to  the  premium  on  specie, 
were  received  at  the  option  of  the  holders,  in  payment  of  government  dues  at  the 
Custom  House,  instead  of  specie,  or  in  specie  if  required.  To  close  the  cash  accounts 
of  the  office,  and  ascertain  the  amount  of  these  checks  which  the  Cashier  might  have 
drawn  and  got  signed,  almost  ad  libitum,  it  was  necessary,  in  the  opinion  of  Mr.  Well- 
man, to  whom  that  duty  was  intrusted,  to  cease  issuing  specie  checks,  and  to  call  in 
thoSe  outstanding.  This  led  to  his  suggestion  to  the  Collector,  to  that  effect,  on  the 
morning  of  the  10th  of  January,  which  was  followed  by  the  notice  in  question,  the 
propriety  and  necessity  of  which  are  self-apparent.  The  defalcation  of  the  Cashier 
was  subsequently  restored  by  his  friends,  and  from  motives  of  respect  for  them  and 
kind  feeling  toward  the  erring  party,  Mr.  Henshaw  has  never  publicly  alluded  to  the 
circumstance,  and  has  submitted  to  the  unjust  imputation  cast  upon  him,  which  the 
publication  of  that  fact  would  at  once  have  removed.  The  additional  statement  of 
Mr.  Wellman  will  show  how  unjustly  Mr.  Henshaw  has  been  accused  in  this  par- 
ticular. [See  Appendix,  No.  2.] 

In  his  recent  letter  to  the  Hon.  Mr.  Saunders,  Mr.  Henshaw  has  said,  that  "  the 
first  fisherman  is  yet  to  be  found,  who  ever  received  a  dollar  of  the  Commonwealth 
Bank  money  as  stated."  And  this  might  well  be  affirmed  from  the  fact  that  no 
fisherman  has  ever  presented  or  intimated  to  Mr.  Henshaw  that  he  had  on  hand  a 
dollar  of  the  bills  of  that  Bank,  received  in  the  manner  alleged.  Had  any  fisherman 
so  suffered  by  depreciated  bills,  it  is  almost  certain  he  would  have  made  it  known 
to  Mr.  Henshaw. 

The  Boston  Atlas  of  February  3,  attempted  to  disprove  the  above  by  an  anonymous 
publication,  giving  an  amount  of  bills  alleged  to  have  been  in  the  hands  of  fishermen 
and  shoresmen  after  the  failure  of  the  Bank,  on  which  bills  it  is  averred  they  lost  a 


10 

discount  of  just  $300.  The  assertion  of  Mr.  Henshaw,  in  his  letter  to  Mr.  Sane- 
ders,  was  made  on  the  fact  that  no  fisherman  had  ever  complained  to  him  or  applied 
for  redress,  and  also  on  the  authority  of  a  gentleman  of  Marblehead,  who  stated  that 
the  president  of  an  insurance  company,  in  that  town,  had  inquired  of  all  the  masters 
of  fishing  vessels  who  had  received  bounties  at  that  time,  and  he  could  not  find  a 
dollar  in  the  hands  of  any  of  them.  This  is  probably  correct,  and  the  statement  in 
the  Atlas  to  the  contrary,  notwithstanding  its  details,  is  not  to  be  relied  on.  The 
fact  that  it  includes  the  pension  money  in  this  list,  leaving  it  to  be  inferred  that  Mr, 
Henshaw  had  something  to  do  with  those  payments,  is  suspicious,  and  is  marked  by 
the  usual  unfairness  of  that  mendacious  press.  And,  moreover,  it  implies  that  the 
fishermen  received  this  money  of  the  Bank  on  the  twelfth  of  January,  when  in  fact 
the  Bank  failed  on  the  eleventh !  So  that  if  any  fishermen  had  Commonwealth  Bank 
bills  which  were  received  on  the  12th  of  January,  they  could  not  have  got  them  from 
Mr.  Henshaw,  nor  from  the  Bank,  for  no  checks  of  his  were  paid  by  the  Bank  after 
the  llth.  But  taking  this  anonymous  statement  as  it  is,  it  amounts  to  the  absurd 
charge  that  David  Henshaw  volunteered  to  defraud  the  fishermen  of  $300  for  the 
sole  and  exclusive  benefit  of  the  treasury  of  the  United  States,  out  of  an  issue  of 
$200,000  in  fishing  bounties  paid  in  that  year  f 

We  have  now  examined  all  the  facts  which  go  to  show  any  previous  knowledge  of 
or  connexion  with  the  failure  of  the  Commonwealth  Bank,  on  the  part  of  Mr.  Hen- 
shaw. There  is  not  a  particle  of  evidence  that  attaches  any  knowledge  to  him, 
previous  to  the  meeting  on  the  evening  of  the  10th  of  January,  and  that  is  proved  to 
have  been,  not  a  knowledge  that  the  Bank  would  fail  the  next  day,  but  that  it  was  in 
an  embarrassed  condition  and  hard-pressed,  as  were  most  of  the  banks  at  that  period. 
The  positive  denial  of  Mr.  Henshaw,  and  all  the  concurring  testimony  as  to  the 
interview,  and  what  preceded  and  followed  it,  go  to  prove  the  negative,  and  to  show 
that  Mr.  Henshaw  had  no  knowledge  that  the  Bank  would  fail,  until  about  one  o'clock 
on  the  day  of  its  failure. 

There  is  no  act  which  Mr.  Henshaw  did  previous  to  the  closing  of  the  doors  of  the 
Bank,  that  he  would  not  have  done,  had  be  been  entirely  ignorant  of  the  condition  of 
the  Bank  until  one  o'clock  on  the  day  of  the  failure.  These  acts,  and  the  only  actsr 
are,  first,  the  publication  of  the  notice  to  call  in  the  specie  checks.  This  is  fully 
explained  by  Mr.  Wellman,  and  that  notice  would  have  been  made  under  the  circum- 
stances, had  the  Bank  never  failed. 

Second.  The  withdrawal  of  the  special  specie  deposit  between  one  and  tw& 
o'clock,  and  of  the  balance  of  Treasury  notes  at  two  o'clock,  on  the  day  of  the  failure ; 
and  both  these  acts  are  consistent  with,  and  were  consequent  upon,  the  knowledge,  at 
about  one  o'clock  that  day,  that  the  Bank  would  fail. 

All  of  these  acts  were  for  the  benefit  of  the  United  States,  and  not  for  the  benefit 
or  security  of  Mr.  Henshaw.  The  blind  inconsistency  of  the  calumniators  of  Mr. 
Henshaw  exhibits  itself  in  their  charging  him,  at  one  moment,  with  dishonestly  with- 
drawing funds  from  the  Bank,  in  consequence  of  his  previous  knowledge  that  it 
would  fail ;  and  in  the  next,  for  Avant  of  fidelity  to  the  government  in  not  withdraw- 
ing these  funds !  His  principal  accuser,  the  Boston  Atlas,  charged  him,  in  1S3S, 
with  fraudulent  conduct  in  calling  in  his  specie  checks  to  save  the  government  the 
discount  on  the  bills  at  the  expense  of  the  poor  fishermen ;  and  now  that  same  paper, 
under  date  of  February  3,  1844.  reverses  that  charge  in  the  following  form:  "He 
(Mr.  Henshaw)  unquestionably  knew  the  state  of  the  Bank  long  before  it  failed,  and 
"  he  neglected  to  take  the  proper  means  to  secure  the  moneys  belonging  to  the 
"  government.  His  statement  that  the  moneys  were  deposited  there  by  authority  of 
"  the  government,  amounts  to  nothing.  By  whatever  authority  the  deposit  was 
"  made,  it  Avas  his  duty,  if  he  saAV  the  impending  danger,  to  have  looked  out  for  the 
"  safety  of  the  government  funds." 

So  that,  according  to  the  logic  of  his  accusers,  if  Mr.  Henshaw  did  remoA'e  the  funds 
of  the  United  States,  he  was  guilty  of  fraudulent  conduct  in  so  doing;  and  if  he  did  not 
remove  them,  he  Avas  guilty  of  official  misconduct  in  not  looking  out  for  the  safety  of 
those  funds  !  And  again,  by  the  same  process  of  reasoning,  the  Atlas  first  charges 
Mr.  Henshaw  with  conniving  at  fraud  to  ?r>ve  hi?  responsibility  for  deposits  made  in 


the   Bank  without  authority,  and  then  says  it  amounts   to  nothing  whether  the 
Collector  made  the  deposits  with  or  without  the  authority  of  the  government ! 

The  answer  to  all  this,  is,  that  Mr.  Henshaw  did  not  look  out  for  himself  when  the 
Bank  failed,  but  he  did  look  out  for  the  United  States.  He  lost  the  value  of  all  his 
shares  in  the  Bank,  and  did  not  provide  for  himself,  as  he  might  have  done,  by  their 
sale  or  transfer,  had  he  anticipated  the  failure  of  the  Bank.  He  took  no  measures  to 
secure  or  relieve  himself  upon  his  large  endorsements,  which  he  also  might  have 
done,  had  he  availed  himself  of  a  previous  knowledge  of  the  failure.  He  was  not 
personally  responsible  for  the  checks  he  had  issued,  nor  for  the  deposits  made  by  the 
government,  these  being  exclusively  official  acts ;  and  yet  the  only  acts  he  did,  after  it 
is  pretended  he  knew  the  Bank  would  fail,  were  directed  solely  to  preserving  the 
funds  of  the  United  States. 

This  brings  us  up  to  the  failure  of  the  Bank,  and  disconnects  David  Henshaw  from 
it,  in  any  relation  that  he  could  or  did  derive  benefit  from, by  anticipating  its  failure; 
and  thus  the  entire  allegation,  and  its  consequent  calumnies,  founded  upon  his 
assumed  previous  knowledge  of  the  failure,  or  of  any  act  of  his  connected  with  that 
failure,  which  was  disreputable  or  improper  in  the  highest  mercantile  or  moral  sense, 
utterly  fails. 

We  will  now  examine  the  relation  of  Mr.  Henshaiv  to  the  Bank,  after  its  failure, 
and  to  the  securities  which  the  United  States  held  against  the  Bank. 

On  the  13th  of  January,  1838,  the  debt  due  the  United  States,  as  subsequently 
ascertained,  was  $338,797,94. 

The  items  that  made  up  this  sum  were  as  follows : 

Deposit  to  the  credit  of  the  Collector,      -  -     $65,941  77 

Deposit  of  Messrs,  Shaw,  How  and  Lewis,  as  Commissioners 

for  building  the  Custom  House,       -        «•"'-•«-   •;•'„'"  ""-'.       71,55538 
John  K.  Simpson,  as  Pension  Agent,      -      ">'  ,.     -       \--v       -     152,684  21 
Credit  to  the  Treasurer  of  the  United  States,  balance  stated  at 
$51,749  90,  but  found  to  be     -         -         -     -  ^ ->',;>•'•     . 
Deposit  to  the  Post  Office  Department,     -        '-'/    "  •''.    "*'[ .     - 
Deposit,  Army  Paymaster  and  Ordnance,  ""•*"     '*"«T'; 

$338,797  94 

David  Henshaw  held  no  relation,  whatever,  as  principal,  or  surety  or  depositor,  to 
either  of  these  items,  except  the  deposit  to  the  credit  of  the  Collector,  of  $65,941  77. 

It  has  been  affirmed  and  reiterated  that  the  United  States  had  a  legal  claim 
against  him  for  this  sum;  but  such  was  not  the  fact.  For  the  purpose  of  simplifying 
the  inquiry,  we  will  here  trace  this  item  through  to  its  final  settlement,  because  more 
stress  has  been  laid  upon  it  by  Mr.  Henshaw's  accusers,  than  any  other,  to  charge 
him  with  indebtedness  to  the  United  States ;  and  if  he  was  not  held  for  this,  he  was 
in  no  way  held  to  the  government  for  a  dollar. 

To  prove  that  the  Collector  was  liable  for  this  sum,  a  portion  of  the  report  of  the 
Solicitor  of  the  Treasury  (Mr.  Gilpin)  to  the  Secretary  of  the  Treasury,  (Mr.  Wood- 
bury,)  dated,  January  25,  1839,  and  a  letter  of  the  Solicitor  to  the  District  Attorney, 
•(Mr.  Mills,)  of  February  9,  1838,  are  relied  on ;  and  it  has  been  asserted,  over  and 
over  again,  but  never  proved,  that  the  government  had  a  good  claim  on  David  Hen- 
shaw for  this  deposit.  This  was  disproved,  and  the  conduct  of  Messrs.  Henshaw  and 
Mills,  in  all  these  transactions,  fnlly  approved  by  this  report  of  the  Solicitor  and 
Secretary,  which  is  now  quoted  in  part,  to  accuse  Mr.  Henshnw. 

The  report  of  the  Solicitor  of  the  Treasury  above  alluded  to,  is  found  in  document 
No.  120,  of  the  House  of  Representatives,  of  the  25th  Congress,  January  26,  1839, 
which  will  be  hereafter  referred  to  for  another  purpose.  [See  Appendix  I.] 

The  Solicitor  there  says  : 

"On  the  24th  of  January,  (1838,)  the  Secretary  of  the  Treasury  informed  this 
*  office  that,  in  addition  to  the  balance  reported  on  the  18th,  as  due  (from  the  Bank,) 
"  there  were  considerable  sums  of  public  money  placed  there  by  collecting  and 
**  disbursing  officers,  and  still  remaining  on  deposit  in  the  Bank,  which  were  included 
"among  its  liabilities  to  the  United  States,  and  for  which  the  sureties  in  the  official 


"  bond  were  considered  by  the  Treasury  Department  to  be  liable,  as  well  as  the  officers, 
"personally,  who  made  the  deposits.  Instructions  were  immediately  given  to  the 
"  District  Attorney  to  this  effect." 

Mr.  Woodbury's  letter  of  the  24th,  above  referred  to,  does  not  express  the  opinion 
that  the  officers  who  had  made  the  deposits  were  personally  liable ;  and  if  it  had 
done  so,  it  would  have  attached  that  liability,  not  to  Mr.  Henshaw,  but  to  the  Secre- 
tary of  the  Treasury ;  because,  as  will  be  seen  hereafter,  Mr.  Henshaw  never  depos- 
ited a  dollar,  except  special  deposits,  in  the  Commonwealth  Bank  after  its  suspension 
in  May,  1837. 

The  letter  from  the  Treasury  Department,  upon  which  the  Solicitor  wrote  his 
instructions  to  the  District  Attorney,  Mr.  Mills,  is  as  follows : 

"  Treasury  Department,  January  24,  1838. 

"  SIR  :  Besides  the  balance  standing  against  the  Commonwealth  Bank,  upon  the 
"  books  of  the  Treasury,  it  is  understood  that  considerable  sums  of  public  money, 
"  which  were  placed  there  by  collecting  and  disbursing  officers,  still  remain  on 
"  deposit  with  that  Bank.  As  these  balances  are  included  in  the  liabilities  of  the 
"  Bank  to  the  United  States,  and  are  covered  by  the  bond  executed  in  its  behalf,  I 
"  have  to  request  that  the  District  Attorney  may  be  instructed  to  keep  them  in  view 
"  in  any  course  he  may  adopt,  for  the  protection  of  the  interests  of  the  United  States. 
"  Their  amount  can  be  ascertained  at  Boston. 

"LEVI  WOODBURY, 

Secretary  of  the  Treasury." 
"  To  H.  D.  GILPIN,  ESQ., 

Solicitor  of  the  Treasury." 

The  above  letter,  enclosed  in  the  one  from  the  Solicitor  to  the  District  Attorney, 
was  received  by  that  officer  on  the  30th  of  January,  1838,  and  formed  the  basis  of 
his  instructions,  as  will  be  seen  by  the  District  Attorney's  report  to  the  Solicitor,  of 
August  6,  1838.  [See  Appendix'D.] 

In  pursuance  of  these  instructions,  the  District  Attorney,  on  the  same  day  they 
were  received,  commenced  suits  against  the  several  sureties  of  the  Bank,  on  the 
deposit  bond  of  February  14,  1837,  laying  the  damages  at  8400,000,  and  including 
the  balance  to  the  credit  of  the  Collector,  of  $65,000.  David  Henshaw  Avas  not  on 
the  deposit  bond,  and  no  action  was  commenced,  nor  directed  to  be  commenced 
against  him,  nor  against  either  of  the  other  disbursing  or  collecting  officers. 

The  other  letter  relied  on  to  establish  the  alleged  liability  of  David  Henshaw,  is 
the  following,  to  the  District  Attorney : 

"Office  of  the  Solicitor  of  the  Treasury,  Feb.  9,  1838. 

"  SIR  :  I  now  enclose  you  certified  copies  of  all  the  bonds  which  you  may  have 
"  occasion  to  use  in  your  proceedings  against  the  Commonwealth  Bank  of  Boston. 
"  and  also  of  the  contract  of  that  institution  with  the  Secretary  of  the  Treasury, 
"  dated  15th  of  July,  1836.  It  is  considered  by  that  officer  that  the  bond  of  the 
"  Bank  given  on  the  14th  of  February,  1837,  embraces  all  moneys  and  funds  what- 
11  soever,  belonging  to  the  United  States,  or  deposited  therein  on  its  behalf,  by  any  of 
"  its  officers,  with  which  it  was  chargeable  at  the  time  of  its  failure.  All  these,  there- 
"  fore,  you  will  include  in  your  legal  proceedings,  and  omit  no  measure  necessary  to 
"  give  notice  and  enforce  the  priority  of  the  United  States  against  the  Bank,  or  any 
"  deceased  or  insolvent  persons  into  whose  hands  their  property  may  have  come. 

"  Very  respectfully, 

«H.  D.  GILPIN, 
Solicitor  of  the  Treasury." 
"  To  JOHN  MILLS,  ESQ. 

U.  S.  District  Attorney,  Boston." 

By  these  instructions,  and  the  legal  proceedings  consequent  thereon,  the  United 


13 

States  ratified  and  assumed  as  its  own,  the  acts  of  all  its  agents  in  relation  to  the 
deposits  standing  to  their  credit  in  the  Commonwealth  Bank. 

The  legal  construction  is  perfectly  clear  on  this  point.  These  several  deposits 
were  either  lawful  or  unauthorized  as  to  the  agents.  If  lawful,  or  if  directed  by  the 
Department,  the  Bank,  and  not  the  agents  were  liable.  If  unauthorized  and  unlaw- 
ful, the  United  States  must  look  to  its  agents  and  their  sureties,  and  not  to  the  Bank. 
If  David  Henshaw  had  been  liable  for  unlawfully  depositing  the  sixty-five  thousand 
dollars,  the  United  States  had  its  remedy  against  him  and  his  sureties,  but  it  could 
riot  sue  the  Bank  for  that  sum,  under  a  bond  covering  only  lawful  deposits,  thus 
ratifying  and  confirming  the  deposit  as  lawful,  and  then  claim  the  same  sum  of  Mr. 
Henshaw,  on  the  ground  of  a  violation  of  official  duty,  in  making  the  deposit ! 

The  United  States  made  its  election  by  suing  the  Bank  for  all  the  deposits,  and 
here  the  individual  liability  of  David  Henshaw,  as  late  Collector,  and  of  Messrs.  Robert 
G.  Shaw,  Hall  J.  How,  and  S.  S.  Lewis,  as  Commissioners  in  the  Custom  House, 
and  of  the  other  disbursing  officers  who  had  balances  in  the  Bank  to  their  account, 
was  at  an  end,  if  indeed  any  such  liability  ever  existed. 

And  in  point  of  fact  and  law  no  such  individual  liability  ever  existed. 

In  the  case  of  the  Custom  House  Commissioners,  their  deposit  was  made  before 
the  Bank  suspended  in  May,  1837. 

In  the  case  of  David  Henshaw,  he  did  not  deposit  the  sixty-five  thousand  dollars 
or  any  part  of  it,  after  the  suspension,  but  that  sum  and  more  was  passed  to  his 
credit,  without  his  agency,  by  the  Treasury  Department,  after  the  suspension. 

A  misapprehension  in  some,  and  a  wilful  misrepresentation  in  others,  on  this  point 
of  the  origin  of  the  balance  left  when  the  Bank  failed,  has  been  the  source  of  many 
groundless  charges  against  the  late  Collector. 

Mr.  Henshaw  tendered  his  resignation  to  President  Jackson,  in  the  early  part  of  1836, 
but  remained  in  office,  at  the  special  request  of  the  President,  till  the  end  of  his  term, 
the  4th  of  March,  1837.  He  again  tendered  his  resignation  to  President  Van  Buren, 
at  that  time,  but  was  requested  by  him  to  remain,  which  he  did  until  the  fall  of  1837, 
when  he  again  resigned,  to  take  effect  on  the  1st  of  January,  1838;  and  had  a  succes- 
sor been  appointed  at  that  time,  Mr.  Henshaw  would  not  have  been  in  office  when 
the  Bank  failed.  But  his  successor  was  not  inducted  till  the  20th  of  January,  1838, 
and  then  this  balance  remained  on  the  books  of  the  Bank. 

The  origin  and  legality  of  all  the  deposits  made  in  the  Commonwealth  Bank,  and 
out  of  which  this  balance  arose,  will  be  seen  from  the  following  facts. 

Previous  to  any  act  of  Congress  upon  the  subject,  and  when  by  the  act  of  Presi- 
dent Jackson,  in  the  removal  of  the  deposits,  the  State  Banks  were  substituted  for 
depositories  of  the  public  money  in  1833,  Mr.  Henshaw,  as  Collector  of  the  port  of 
Boston,  was  directed  to  make  deposits  of  the  public  money  in  the  Commonwealth 
Bank,  which  he  accordingly  did,  and  his  proceedings  in  this  respect,  Avere  fully 
approved  by  Mr.  Secretary  Taney,  the  5th  of  October,  1833. 

The  details  of  these  proceedings  were  as  follows.  On  the  26th  of  September,  1833, 
Mr.  Secretary  Taney  notified  Mr.  Henshaw  of  the  determination  to  remove  the 
deposits,  and  that  he  had  selected  the  Commonwealth  Bank  and  Merchant's  Bank 
in  Boston,  for  depositories.  Contracts  to  this  effect  were  forwarded  to  the  Collector 
for  those  Banks  to  execute,  and  instructions  given  to  make  deposits  therein,  after  the 
30th  of  September,  of  all  the  public  moneys,  until  further  orders  of  the  Department* 
[See  Appendix  No.  3.] 

Mr.  Henshaw's  reply  to  the  Secretary,  of  September  30th,  enclosing  the  contracts, 
suggested  a  mode  of  dividing  the  public  business  between  the  two  Banks,  which  was 
acceptable  to  them,  and  would  require  the  Collector  to  keep  an  account  with  but  one 
Bank,  thus  saving  half  the  labor.  [See  Appendix,  No.  4.]  This  modification  was 
adopted  and  fully  approved  by  the  Department,  as  will  be  seen  by  Mr.  Taney's  let- 
ter of  October  5th,  1833.  in  which  he  says,  "  your  proceedings  are  approved  by  the 
Department."  [See  Appendix  No.  5.] 

The  deposits  continued  to  be  made  under  the  above  authority,  until  the  passage 
of  the  deposit  act  of  June  23d,  1836,  by  Congress.  The  15th  of  July,  1836,  the 
Bank  executed  a  contract  "  to  discharge  all  the  duties  and  services  prescribed  by  the 


14 

Act  of  the  23d  of  June,  1836,"  and  on  the  14th  of  February,  1837,  a  bond  was  exe- 
cuted with  sureties,  for  the  performance  of  the  contract  entered  into  by  the  Bank  on 
the  15th  of  July,  1S36.  Under  this  arrangement  between  the  Department  and  the 
Bank,  which  was  wholly  independent  of  Mr.  Henshaw,  the  deposits  continued  to  be 
made  by  authority  of  law,  until  the  Bank,  with  all  others  in  the  State,  suspended 
specie  payments  the  12th  of  May,  1S37. 

The  Commonwealth  Bank  accordingly  ceased  to  be  a  deposit  bank,  on  its  sus- 
pension of  specie  payments,  in  May,  1837,  and  was  notified  to  that  effect  the  18th 
of  that  month.  At  that  time,  Mr.  Henshaw  had  to  his  credit  as  Collector,  in  that 
Bank,  the  sum  of  SSO.S21  49,  which  had  been  deposited  under  the  above  instructions 
and  authority,  before  the  suspension,  and  he  so  advised  the  Department  in  his  letter 
of  May  23d,  1S37,  giving  the  items  ;  [for  which  see  Appendix  No.  6.]  The  accru- 
ing salaries  and  expenses  of  his  office  were  paid  out  of  this  balance  of  $80,000, 
which  would  have  been  wholly  exhausted  by  that  appropriation ;  so  that  every  dollar 
he  had  placed  in  the  Bank  before  the  suspension,  under  the  deposit  act,  would  have 
been  withdrawn,  and  no  balance  have  remained  to  his  credit  when  the  Bank  failed, 
but  for  the  following  circumstances. 

After  the  suspension,  to  wit,  on  the  21st  of  July,  1837,  the  Secretary  of  the  Treas- 
ury caused  to  be  placed  to  the  credit  of  Mr.  Henshaw,  in  the  Commonwealth  Bank, 
the  sum  of  $30,500,  as  so  much  of  the  balance  which  was  due  the  U.  States  when 
the  Bank  suspended  in  May,  1837.  The  authority  for  this  credit,  and  the  reasons 
that  required  it  are  explained  in  the  Secretary's  letter  to  Mr.  Henshaw,  which  is 
subjoined. 

"  Treasury  Department,  July  17,  1S37. 

44  SIR, — As  it  will  become  necessary,  from  time  to  time,  to  authorize  the  Collectors  of 
'  such  of  the  Districts  in  the  vicinity  of  Boston,  to  draw  upon  you  for  money  to 
'  defray  the  current  expenses  of  their  Districts,  as  do  not  collect  revenue  enough  for 
'  that  purpose ;  in  order  to  place  you  in  funds  for  this  object,  the  Treasurer  of  the 
'  United  States  has  been  instructed  to  require  the  Commonwealth  Bank,  in  your 
'  city,  to  place  to  your  credit,  as  Collector  of  the  Customs,  a  portion  of  the  moneys 
'  deposited  by  you  in  that  institution  to  the  credit  of  the  Treasurer,  previous  to  the 
'  suspension  of  specie  payments,  and  which  have  not  been  brought  into  the  Treasury 
'  by  covering  warrant.  The  sum  of  thirty  thousand  five  hundred  dollars,  will,  accord- 
'  ingly,  be  directed  to  be  placed  to  your  credit,  in  the  aforesaid  Bank,  and  be  subject 
'  to  your  check  or  draft. 

"  Respectfully,  &c. 

»  DAVID  HENSHAW,  Esq.  "  LEVI  WOODBURY, 

Collector,  $-c."  Sec'y  of  the  Treasury." 

The  Bank  was  accordingly  notified  of  this  transfer  of  credit,  of  which  the  Deputy 
Collector  was  informed  by  the  Cashier,  as  follows  : 

"  COMMONWEALTH  BANK,      ) 
Boston,  July  21,  1837.  \ 
"  A.  BAILEY,  Esq. 

"  Sm, — I  have  received  instructions  this  day.  to  place  to  the  account  of  David 
"  Henshaw,  Collector,  thirty  thousand  five  hundred  dollars,  from  the  Secretary  of  the 
"  Treasury,  by  John  Campbell,  Esq.,  Treasurer  of  the  United  States,  which  amount 
"  has  been  credited  as  directed. 

"  Respectfully. 

''CHARLES  HOOD,  Cashier." 

In  December,  1837,  it  became  necessary  to  provide  for  the  fishing  bounties,  and 
the  Secretary  of  the  Treasury  sent  to  Mr.  Henshaw,  for  that  purpose,  a  Treasury 
check  upon  the  Commonwealth  Bank  for  the  further  sum  of  $42,000,  which  was 
thus  transferred  from  the  credit  of  the  Treasurer  of  the  United  States  to  that  of  the 
Collector,  to  pay  the  fishing  bounties. 


This  fact  was  stated  in  the  testimony  of  Thomas  W.  Colburn,  Teller  of  the  Bank, 
before  the  committee  of  the  Massachusetts  Legislature,  as  appears  in  their  printed 
report.  Mr.  Colburn  there  says,  "  the  Collector,  Dec.  21,  1837,  deposited  a  draft  for 
$42,000,  drawn  by  the  Treasurer  (of  the  United  States)  on  the  Commonwealth 
Bank."  [See  Appendix,  page  60.] 

The  necessity  for  this  arrangement,  on  the  part  of  the  Department  at  Washington, 
to  meet  the  fishing  bounties  not  only  in  Massachusetts  and  Maine,  but  in  Rhode 
Island  and  Connecticut,  the  Collectors  of  which  were  authorized  to  draw  upon  Mr. 
Henshaw,  will  be  seen  by  instructions  to  the  Collector  of  Boston.  [See  Appendix 
Nos.  7  and  8.] 

It  will  be  seen,  therefore,  that  the  sum  of  $72,500  was  thus  placed  to  the  credit  of 
the  Collector,  by  the  Treasury  Department,  after  the  Bank  ceased  to  be  a  deposit  bank. 
There  was  at  no  time  any  other  deposit  to  the  credit  of  Mr.  Henshaw,  made  by 
him  or  the  Department,  (except  special  deposits  which  were  withdrawn,)  in  the  Com- 
monwealth Bank,  during  the  period  of  suspension ;  so  that  the  sixty-five  thousand 
dollars  to  his  credit,  which  remained  in  the  Bank  at  the  time  of  its  failure,  was  a  less 
amount  than  was  placed  there  after  the  suspension,  by  the  Treasury  Department. 

The  manner  in  which  that  balance  arose,  was  distinctly  stated  to  the  Treasury 
Department,  by  Mr.  Henshaw,  at  a  subsequent  time,  in  the  following  communication : 

Extract  of  a  letter  from  David  Henshaw,  to  Hon.  Levi  Woodbury,  Secretary  of  the 
Treasury,  dated  Feb.  16,  1838. 

"  Since  my  letter  to  you  of  May  23,  1837,  stating  the  balance  then  in  the  Com- 
"  mon wealth  Bank,  there  have  been  only  two  sums  placed  to  my  credit  there,  viz., 
"  $30,500 ;  ordered  to  my  credit,  as  will  appear  by  your  letter  of  July  17,  1837,  and 
"  -?42,000  sent  me  in  December  last  to  pay  bounties  on  fishing  vessels.  The  last 
"  sum  ($42,000)  was  put  to  my  credit,  and  has  been  applied  to  the  purposes  for 
"  which  it  Avas  remitted.  The  difference  between  the  sum  reported  to  be  in  the 
"  Bank,  in  my  letter  of  May  23,  adding  thereto  the  sum  of  $30,500,  ordered  to  my 
"  credit  in  your  letter  of  July  17,  and  the  sum  now  on  hand,  has  been  paid  out  in 
"  various  disbursements  for  the  United  States. 

"  I  beg  you  to  understand  that  I  have  no  difference  with  Mr.  Bancroft,  (his  successor,) 
"  on  account  of  this  balance  (the  $65,000.)  It  is  an  amount  belonging  to  the  United 
"  States,  standing  to  my  credit  as  Collector,  in  the  Commonwealth  Bank,  placed  there 
"  in  conformity  to  Treasury  instructions,  and  which  I  am  ready  to  transfer  to  my 
"  successor,  or  to  any  other  person  legally  authorized  to  receive  and  receipt  for  it." 

We  have  thus  conclusively  established  the  fact,  that  not  a  dollar  of  the  balance  of 
$65,941  to  the  credit  of  the  Collector,  in  the  Commomoealth  Bank,  ivhen  it  failed, 
was  placed  there  by  David  Henshaw,  after  the  Bank  suspended  and  ceased  to  be  a 
deposit  bank,  under  the  deposit  act  of  1836. 

How  then  could  the  United  States  have  any  personal  claim  whatever  upon  the 
Collector,  for  that  balance,  or  any  part  of  it,  either  in  law,  equity  or  honor? 

The  Collector's  deposits,  previous  to  the  suspension  in  May,  1837,  were  of  course 
lawful,  because  they  were  authorized  and  required  by  force  of  law ;  and  the  subse- 
quent deposits  were,  in  fact,  made  by  credits  passed  to  him  through  the  direct  action 
of  the  Treasury  Department.  The  disbursements  subsequently  made  by  the  Collec- 
tor, from  this  fund,  up  to  the  failure  of  the  Bank,  left  the  balance  of  the  $65,000  in 
question,  and  for  this  David  Henshaw  was  in  no  way  personally  liable. 

This  statement  was  never  called  in  question  by  the  Secretary  or  Solicitor  of  the 
Treasury.  In  the  final  settlement  of  his  accounts,  as  Collector,  after  he  had  resigned, 
Mr.  Henshaw  claimed  to  be  credited,  of  course,  with  this  sum  of  $65,941,  and  a 
further  sum  on  emolument  account  for  the  year  1829  ;  and  a  third  sum  for  amount  paid 
to  Aveighers  and  guagers  in  1836  and  1837,  under  the  construction  of  the  law  given 
by  Judge  Davis  and  Judge  Story,  in  the  District  and  Circuit  Courts  of  the  United 
States,  in  the  cases  of  William  Pearce,  Collector  at  Gloucester,  and  R.  D.  Harris, 
Navy  Agent.  These  items  had  to  pass  through  the  subordinate  accounting  officers, 
and  the  question  of  allowance  of  these  item?  was  there  raised. 


16 

The  Secretary  of  the  Treasury  (as  is  stated  by  him  in  his  letter  to  Hon.  James 
K.  Polk,  Speaker  of  the  House,  Feb.,  1839,  No.  180)  "  not  possessing,  by  law,  any 
authority  to  settle  said  accounts,  or  interfere  and  control  the  adjustment  of  any  allow- 
ances claimed,  left  the  accounting  officers  and  the  Solicitor  to  discharge  their  respec- 
tive duties  in  conformity  to  the  acts  of  Congress,  as  applicable  to  all  the  facts  of  the 
case." 

Mr.  Henshaw  urged  the  adjustment  of  his  accounts,  and  correspondence  to  that 
effect  was  had  with  the  Department,  and  with  the  President.  On  the  15th  of  Novem- 
ber, 1838,  the  First  Auditor  (Mr.  Miller)  made  his  report  to  the  Comptroller  of  the 
Treasury,  at  which  time  he  had  no  knowledge  of  the  origin  of  the  deposit,  and  no 
official  notice  that  the  United  States,  by  instruction  of  the  Treasury  Department,  had 
sued  the  Bank  and  its  sureties  on  the  deposit  bond,  for  this  same  sum  of  $65,941. 
In  his  letter  of  November  15,  1838,  the  First  Auditor  says,  "  I  may,  perhaps,  not  fully 
Understand  the  Avhole  transaction,  and,  therefore,  do  not  wish  to  attach  any  blame  to 
Mr.  Henehaw.  All  I  mean  to  say  is,  that,  from  my  understanding  of  the  case,  I 
found  it  so  much  involved  in  difficulties,  that  I  did  not  feel  authorized  to  give  the 
credit  claimed  by  Mr.  Henshaw." 

It  is  obvious,  that  the  First  Auditor  must  have  been  entirely  ignorant  of  the  fact 
that  Mr.  Henshaw  had  made  no  deposits  since  the  suspension,  and  that  the  balance 
in  the  Bank  was  the  proceeds  of  the  credits  to  Mr.  Henshaw,  placed  there  directly 
by  the  Treasury  Department.  Had  he  understood  this  part  of  the  case,  it  could  not, 
in  his  or  any  man's  mind,  have  been  involved  in  the  slightest  difficulty. 

On  the  9th  of  February,  1839,  the  Auditor  made  a  further  statement  to  the  Comp- 
troller, to  whom  the  accounts  had  been  referred,  as  follows : 

"  Treasury  Department,  Pel.  9,  1S39. 

"  SIR, — In  my  letter  to  you  of  the  6th  instant,  in  relation  to  the  balance  on  the 
'  account  of  David  Henshaw,  Esq.,  and  enclosing  a  copy  of  my  letter  to  the  Secre- 
1  tary  of  the  Treasury,  of  the  16th  of  November  last,  I  stated  I  had  received  no 
'  reply  to  that  letter.  I  should  have  stated,  however,  further,  that  I  did  receive  a 
'  communication  from  the  Solicitor  of  the  Treasury,  to  whom  my  letter  had  been 
'  referred,  informing  me  that  the  District  Attorney  "had  included  the  sum  of  865,- 
'  941  77,  which  was  to  the  credit  of  Mr.  Henshaw,  in  the  Commonwealth  Bank, 
'  in  the  judgment  taken  in  favor  of  the  United  States  against  the  Bank.  He  also 
'  sent  me  a  copy  of  a  letter  from  the  Secretary  to  him,  instructing  him  to  advise  the 
'  District  Attorney  to  include  in  the  judgment,  the  sums  to  the  credit  of  the  Collector 
'  and  disbursing  officers,  as  well  as  that  to  the  credit  of  the  Treasurer.  Still,  how- 
'  ever,  as  both  the  Solicitor  and  the  Secretary  were  silent  as  to  whether  the  taking 
'  of  this  judgment  was  to  be  regarded  as  a  collateral  security  or  an  entire  discharge 
'  of  Mr.  Henshaw,  I  thought  the  safest  course  to  decline  giving  the  credit  claimed 
'  by  Mr.  Henshaw,  until  further  advised  upon  the  subject. 

"  Respectfully,  &c. 

"  JAMES  N.  BARKER,  Esq."  J.  MILLER." 

The  accounts  of  Mr.  Henshaw  still  remaining  unsettled  at  the  Treasury  Depart- 
ment, he  again  wrote  to  the  Comptroller,  under  date  of  December  2d,  1839,  restating 
the  origin  and  effect  of  the  item  of  deposit  in  his  account,  as  follows : 

Extract  of  a  letter  from  D.  Henshaw,  to  the  Comptroller,  Dec.  2,  1839. 
"  In  relation  to  the  first  item,  $65,941  77,  which  has  been  the  subject  of  former 
frequent  communications  with  the  Treasury  Department,  I  have  to  remark  that  I 
am  entitled  to  a  credit  upon  the  principle  admitted  in  the  First  Auditor's  letter  to 
the  Secretary  of  the  Treasury,  of  November  15,  1838.  The  Auditor,  however, 
misapprehends  the  facts,  in  supposing  that  I  made  frequent  deposits  of  bank  paper 
or  bank  credits,  in  the  Commonwealth  Bank,  after  I  was  notified  that  it  ceased  to 
be  a  deposit  bank.  The  only  sums  thus  deposited  to  my  credit,  were  $30,500, 
placed  there  to  my  credit  by  the  Department  on  its  own  motion,  and  812,000,  a 


17 

"  check  on  the  Bank  itself,  to  aid  in  paying  the  fishing  bounties,  and  which  was 
"  appropriated  for  that  purpose."  [For  the  whole  of  this  letter,  which  fully  explains 
every  item  of  the  account,  see  Appendix  No.  9.] 

It  thus  appears  that  no  liability  whatever  could  attach  to  Mr.  Henshaw  for  deposits 
not  made  by  him  after  the  Bank  suspended,  but  placed  there  to  his  credit  as  Collec- 
tor, by  the  Treasury  Department ;  and  in  this  connexion  will  be  seen  the  gross  injus- 
tice and  falsity  of  charging  upon  Mr.  Henshaw,  as  a  fraud  upon  the  fishermen,  the 
payment  of  bounties  from  the  very  funds  expressly  furnished  him  for  that  purpose. 

We  have  now  shown  that  David  Henshaw  was  not  in  any  relation,  manner  or 
form  liable  for  the  deposit  of  sixty-five  thousand  dollars, — 

First,  Because  it  was  no  part  of  any  deposit  made  by  him  after  the  Bank  ceased 
to  be  a  deposit  bank. 

Second,  Because  it  was  passed  to  his  credit  as  Collector,  by  the  acts  and  orders 
of  the  Treasury  Department,  subsequent  to  the  suspension,  and  was  a  transfer  to  him 
of  Treasury  credits. 

Third,  Because,  by  the  express  instructions  of  the  Secretary  of  the  Treasury, 
(Jan.  24,  1838,)  and  of  the  Solicitor  of  the  Treasury,  (Feb.  9,  1838,)  the  District 
Attorney  commenced  suits  against  the  Commonwealth  Bank  and  its  deposit  sureties, 
to  recover  this  deposit  of  sixty-five  thousand  dollars,  as  "  covered  by  the  bond  executed 
on  behalf  of  the  Bank." 

Either  one  of  these  reasons  is  an  ample,  legal,  equitable  and  moral  defence  to  any 
claim  for  that  sum  upon  David  Henshaw  or  his  sureties,  as  Collector.  But  there  is  a 
fourth  still  stronger ;  and  that  is  that  the  United  States,  by  direction  of  the  Secretary 
and  Solicitor  of  the  Treasury,  and  through  its  officer,  the  District  Attorney,  acting 
under  that  advice,  actually  took  and  recovered  judgment  against  the  Bank  for  this 
sum  of  sixty-five  thousand  dollars,  and  had  the  judgment  satisfied. 

This  appears  by  documents.  The  First  Auditor  in  his  letter  to  the  Secretary  of  the 
Treasury,  of  Nov.  15,  1838,  (House  document,  No.  ISO,  February,  1839,)  says,  "  I 
now  understand  that  a  judgment  has  been  taken  in  favor  of  the  United  States 
against  the  Bank,  including  the  above  sum  (of  $65,941  77.)  I  presume,  that  if  it  has 
been  taken  under  the  direction  of  the  Department,  unless  taken  as  a  collateral  secu- 
rity with  the  consent  of  Mr.  Henshaw,  it  will  release  him ;  and  that,  as  a  matter  of 
course,  he  ought  to  be  credited  for  the  amount  on  his  account." 

The  27th  of  November,  1838,  the  Solicitor  of  the  Treasury  informed  the  First 
Auditor  "  that  judgment  was  recovered  against  the  Bank,  on  the  19th  of  May,  1838, 
for  $325,517,  which  is  understood  to  include  the  whole  sum  due  from  it,"  [embrac- 
ing the  sum  in  question,  of  sixty-five  thousand  dollars.] 

The  Solicitor  also  sent  to  the  Auditor  Mr.  Woodbury's  instructions  of  January 
24,  1838,  to  prosecute  the  sureties  of  the  Bank  on  the  bond  of  Feb.  14,  1837,  for  all 
the  balances  of  public  money  placed  there  by  collecting  and  disbursing  officers  ;  also 
a  letter  from  Mr.  Mills,  the  District  Attorney,  of  January  29,  1838,  to  the  Solicitor, 
giving  the  items  of  the  Bank  account,  including  the  sixty-five  thousand  dollars 
deposit,  to  the  credit  of  the  late  Collector,  and  informing  him  that  it  will  be  neces- 
sary to  bring  a  new  action,  if  it  is  intended  to  recover  upon  the  bond  the  whole 
amount  deposited  or  "placed  there  by  collecting  and  disbursing  officers." 

And  in  reply  to  this,  the  letter  of  the  Solicitor  to  Mr.  Mills,  of  February  9,  1838, 
enclosing  a  certified  copy  of  the  bond  of  February  14,  1837,  and  instructing  him  to 
sue  upon  it  for  all  moneys  or  funds  belonging  to  the  United  States,  or  deposited  by 
any  of  its  officers,  which  was  accordingly  done,  and  a  new  action  brought  to  cover 
the  whole  amount. 

On  the  28lh  of  September,  1838,  the  Comptroller  was  furnished  with  the  certificate 
of  the  District  Attorney,  that  under  the  instructions  of  the  Department,  "  the  sum  of 
$65,941  77,  which  stood  to  the  credit  of  the  Collector  of  the  port  of  Boston,  in  the 
Commonwealth  Bank,  January  12th,  1838,  was  included  in  the  judgment  for 
$325,517,  recovered  by  the  United  States  against  the  Commonwealth  Bank." 

And  on  the  8th  of  February,  1839,  the  Comptroller,  "  in  reply  to  inquiries  proposed 
in  a  resolution  of  the  House  of  Representatives,  28th  of  January,  1839,  in  relation  to 
the  accounts  of  David  Henshaw,"  cites  the  opinion  of  the  Auditor,  that  the  $65,941, 
3 


"  ought,  as  a  matter  of  course,  upon  the  above  facts,  to  Ic  credited  to  Mr.  Henshaw, 
"  in  the  settlement  of  his  accounts." 

So  that  every  accounting  and  advising  officer  of  the  Treasury  Department  con- 
curred in  the  correctness  of  withdrawing  the  sixty-five  thousand  dollars  from  the  debit 
of  Mr.  Henshaw's  accounts.  But  as  the  nominal  balance  against  the  late  Collector 
at  the  Auditor's  office,  stood  at  $80,272,  embracing  items  of  disbursement,  and 
especially  the  item  of  $9,120  which  had  been  paid  out  to  the  weighers  and  guagers, 
in  1836-37,  upon  the  ground  that  the  limitation  act  of  1836,  concerning  fees,  was 
not  retrospective,  as  to  fees  already  earned ;  there  was  a  delay  in  the  adjustment  of 
this  account,  until  1841. 

The  2d  of  December,  1839,  as  has  been  seen  by  his  letter  of  that  date,  [Appendix 
9,]  Mr.  Henshaw  wrote  to  the  Comptroller,  urging  an  adjustment  of  his  accounts, 
and  stating  the  grounds  of  his  claims  to  all  the  items  withheld  from  his  credit.  In 
regard  to  the  main  item  of  sixty-five  thousand  dollars,  he  then  said,  what  is  apparent 
from  the  above  documents,  that  "  the  United  States  never  had  any  claim  on  him  for 
the  solvency  of  the  Bank,  or  the  payment  of  this  money  held  by  the  Bank,  either  in 
law  or  equity;"  and  he  cited  the  decisions  of  the  United  States'  Courts,  which 
covered  all  his  payments  to  the  Weighers  and  Gaugers. 

Finally,  Mr.  Henshaw  Avas  so  desirous  of  closing  his  accounts,  that,  to  avoid  longer 
delay,  he  preferred  that  a  suit  should  be  commenced  by  the  government  against 
him,  which  was  done,  for  the  adjustment  of  the  disputed  balances,  by  a  judicial 
decision. 

This  action  was  tried  in  the  District  Court  of  the  United  States,  before  Judge 
Davis,  in  December,  1840.  The  United  States  claimed  in  the  writ  the  sum  of 
seventy-five  thousand  dollars,  as  due  from  Mr.  Henshaw,  and  under  the  directions  of 
the  Court,  the  jury  returned  a  verdict  entire  for  Mr.  Henshaw,  as  follows  : 

"  United  States,  vs.  David  Henshaw.  The  jury  find  that  the  defendant  did  not 
<;  promise  in  manner  and  form,  as  set  forth  in  the  plaintiff's  writ. 

"  JOHN  HARRIS,  Foreman." 

Upon  a  hearing  before  Judge  Davis,  on  matters  of  law,  the  Court  sustained  the 
verdict  as  to  the  sixty-five  thousand  dollars  deposit,  and  every  other  item  of  charge, 
except  the  sum  of  $836  25  of  the  amount  paid  to  the  Weighers  and  Gaugers.  Pre- 
ferring to  pay  this  small  amount,  rather  than  incur  the  delay  and  expense  of  an  appeal 
to  the  Circuit  Court,  Mr.  Henshaw  submitted  to  judgment  for  that  sum,  by  default,  and 
immediately  paid  it  over  to  the  United  States.  It  was  refunded  to  him  by  the  offi- 
cers who  had  received  it,  and  they  applied  to  the  Department,  by  which  it  was 
referred  to  the  auditing  and  accounting  officers,  and  by  them  was  subsequently 
audited  and  allowed ;  thus  sustaining,  by  these  formal  decisions,  the  position  taken 
by  Mr.  Henshaw  when  he  retired  from  office,  in  January,  1838. 

The  evidence  of  this  disposition  of  the  whole  matter,  will  be  seen  by  a  copy  of 
the  record  of  the  Court.  [See  Appendix,  No.  10.] 

The  account  was  thereupon  closed  at  the  Department,  and  Mr.  Henshaw  was 
furnished  with  the  following  receipt  in  full  of  all  demands  : 

"Comptroller's  Office,  March  30,  1841. 

"  SIR, — Your  accounts  of  the  Customs  have  been  finally  adjusted  and  closed  on 
"  the  books  of  the  Treasury. 

"  Very  respectfully,  your  obt.  servt. 

"  J.  N.  BAEKER,  Comptroller. 
"  DAVID  HENSHAW,  Esq. 
"  Late  Collector,  Boston,  Mass." 

We  have  thus  traced  this  important  item  through  all  its  phases,  and  brought  Mr. 
Henshaw  out  of  his  accounts  with  the  United  States,  and  his  deposits  in  the  Com- 
monwealth Bank,  with  the  endorsement  of  the  U.  S.  Court  and  the  U.  S.  Govern- 
ment, that  he  has  accounted  for  every  dollar  of  his  personal  and  official  liability. 


19 

The  delay  attending  this  settlement,  (which  is  in  no  way  attributable  to  Mr.  Hen- 
shaw  ;)  its  examination  by  every  legal  and  accounting  department  of  the  government ; 
its  reference  to  congress,  under  a  resolution  of  inquiry,  of  January  28th,  1839 ;  its 
judicial  investigation  by  the  court  and  jury,  and  their  verdict  and  judgment;  its  final 
adjustment  in  1841,  when  the  political  friends  of  David  Henshaw  had  gone  out  of 
power,  and  his  political  opponents  had  come  in ;  and  the  fact,  that,  during  the  whole 
of  this  period,  the  secret  accusers  and  personal  enemies  of  Messrs.  Mills  and  Hen- 
shaw,  (through  whom  these  exploded  charges  have  recently  been  revived,  to  operate 
upon  the  Senate,)  were  besieging  the  President,  the  heads  of  Department  and  Con- 
gress, in  every  possible  form,  in  order  to  fix  upon  somebody  some  charge  of  fraud,  or 
contrivance,  or  mismanagement  in  these  proceedings,  (in  all  of  which  they  failed,) — 
completely  demonstrate  that  no  public  officer  or  private  individual  could  pass  through 
such  an  ordeal,  but  by  the  force  of  integrity,  accuracy,  and  uprightness  in  his  busi- 
ness transactions. 

In  all  the  legal  proceedings  connected  with  this  settlement,  it  will  be  perceived  that 
Mr.  Mills,  the  United  States'  District  Attorney,  conducted  with  professional  prompt- 
ness and  fidelity  in  the  discharge  of  his  duties,  under  the  direct  instructions  and  sanc- 
tion of  his  official  advisers. 

The  third  and  only  remaining  branch  of  the  inquiry,  is  the  relation  of  David  Hen- 
shaw to  the  Warren  Association,  and  through  that  to  the  Bank  and  the  United 
States,  in  what  is  flippantly  called  the  "  SOUTH  BOSTON  LAND  FRAUD."  This  charge, 
which  has  been  reiterated  with  great  boldness  but  little  responsibility,  is,  in  substance., 
that  David  Henshaw  was  a  member  of  a  private  association,  unincorporated,  which 
had  purchased  lands  at  South  Boston,  and  borrowed  $180,000  of  the  Commonwealth 
Bank ;  and  that  it  was  fraudulently  contrived,  by  Mr-  Henshaw,  that  the  lands  of 
the  Warren  Association  should  be  appraised  and  set  off  to  the  United  States,  in  pay- 
ment of  that  debt,  so  as  to  defraud  the  United  States,  by  a  corrupt  appraisement,  out 
of  some  hundred  and  forty  thousand  dollars. 

The  mere  statement  of  this  charge  shows  that  it  necessarily  involves  the  corrupt 
conduct  or  acquiescence  not  only  of  Mr.  Henshaw,  but  of  all  who  participated  in  and 
were  knowing  to  that  transaction ;  together  with  wilful  perjury  on  the  part  of  the 
sworn  appraisers. 

It  would  be  sufficient  with  men,  who,  possessing  personal  integrity  themselves, 
are  capable  of  appreciating  it  in  others,  and  who  know  the  character  and  standing  of 
those  who  must  have  been  the  accomplices  or  tools  of  David  Henshaw  in  this  pre- 
tended fraud,  to  give  their  names  as  a  full  answer  to  this  allegation ;  but  as  the  pur- 
pose of  this  inquiry  is  to  meet  the  calumnies  that  have  been  so  widely  and  pertina- 
ciously circulated,  in  every  tangible  form  in  which  they  have  been  presented,  this 
charge  will  also  be  examined  in  detail. 

By  the  preceding  proofs,  Mr.  Henshaw  stands  disconnected  from  all  liability  to 
the  Commonwealth  Bank  or  to  the  United  States.  He  was  a  member  and  one  of 
the  Directors  of  the  Warren  Association.  The  Directors  were  Messrs.  Mark  Healey, 
David  Henshaw,  Thomas  Curtis,  Hall  J.  How,  Henry  Upham,  Ebenezer  Jones,  and 
J.  L.  Sibley.  The  Trustees,  John  Pickering,  H-  J.  How,  E.  Jones,  J.  L.  Sibley, 
and  Charles  Hood,  who  was  also  Treasurer,  and  James  W.  Fenno,  Clerk.  Th.'-re 
were  articles  of  agreement  of  the  Association,  one  of  which  was  a  stipulation  and  pro- 
hibition that  no  officer  of  the  Association  should  borrow  money  or  incur  debts,  with- 
out a  resolution  to  that  effect.  The  number  of  shares  was  five  hundred,  at  $250  per 
share,  of  which  Mr.  Henshaw  held  twenty,  say  $5,000,  about  four  per  cent,  of  the 
capital ;  so  that  his  share  of  the  debt  due  from  the  Association  to  the  Bank,  would 
have  been  about  $6,400,  the  Association  having  paid  all  its  debts. 

The  substance  of  the  charge,  therefore,  is,  that  for  this  inconsiderable  interest, 
David  Henshaw  not  only  committed  a  gross  fraud  himself  upon  the  United  States, 
but  induced,  several  persons,  esteemed  of  the  highest  integrity  among  the  lawyers, 
merchants,  judicial  officers  and  citizens  of  Boston,  to  become  his  instruments  in  this 
fraud,  and  even  to  perjure  themselves  to  accomplish  his  purpose! 

Now  the  only  pecuniary  interest  Mr,  Henshaw  could  have  had,  in  his  relation  to 
the  Warren  Association,  was  to  relieve  himself  and  his  friends  from  its  debt  to  the 


20 

Bank.  For  the  purpose  of  implicating  him  in  the  failure  of  the  Commonwealth 
Bank,  it  is  assumed  by  his  libellers  that  he  had  unlimited  control  over  it.  The 
Committee  of  the  Legislature  of  Massachusetts,  that  examined  the  Commonwealth 
Bank,  in  their  report  say,  that  "  The  Warren  Association  have  had  the  same  access 
to  the  moneys  of  the  Bank  as  though  the  Bank  had  been  their  Treasurer  instead  of 
Mr.  Hood."  Whether  this  were  so  or  not,  the  Treasurer  of  the  Association  was  the 
Cashier  of  the  Bank,  and  its  President  was  a  Director  in  the  Bank. 

Assuming  then,  with  Mr.  Henshaw's  accusers,  that  his  purpose  was  to  make  the 
best  terms  for  the  debt  of  the  Association,  and  which  he  had  a  right  to  do,  would  not 
ordinary  sagacity  have  suggested  an  arrangement  through  this  channel,  rather  than 
the  course  taken  of  a  surrender  of  the  notes  of  the  Association  to  the  United  States' 
officer,  to  abide  the  judgment  in  favor  of  the  United  States,  should  it  be  obtained 
against  the  sureties  of  the  Bank,  and  the  subsequent  transfer  of  the  lands  of  the  Asso- 
ciation to  the  Bank,  that  the  United  States  might  levy  upon  them? 

There  was  ample  time  (between  the  failure  of  the  Bank  on  the  llth  of  January, 
and  the  first  suit  brought  by  the  United  States,  which  was  the  22d  of  January)  to 
have  negotiated  this  matter.  The  evidences  of  the  debt  of  the  Association  to  the 
Bank  were  transferable  by  endorsement,  and  were  easily  adjusted  by  compromise,  or 
settlement,  if  there  had  been  any  design  of  collusion  or  evasion.  Or  if  the  Warren 
Association  had  taken  no  steps  and  left  their  paper  with  the  Bank,  the  result  could 
only  have  been  that  if  the  Bank  or  its  receivers  should  succeed  in  recovering  judg- 
ment against  the  Association,  it  must  end  in  a  levy  upon  the  lands  of  the  Company, 
which  by  the  laws  of  Massachusetts  could  not  have  been  sold  on  execution  ;  and  this 
was  precisely  the  thing  that  was  done,  in  the  settlement  with  the  United  States, 
and  out  of  which  all  the  complaint  has  grown. 

In  the  first  case  supposed,  viz.,  a  recovery  by  the  Bank  against  the  Association, 
the  law  of  the  State  would  have  required  the  lands  to  have  been  set  ofTupon  execu- 
tion ;  and  in  the  other  case  the  same  thing  was  done  by  consent  of  parties,  and  which 
could  not  have  been  done  without  such  consent. 

Finding  so  little  of  motive  for  fraud  in  this  transaction,  let  the  facts  be  examined 
that  bear  upon  it. 

It  will  be  seen  that  there  never  was  any  relation  of  debtor  and  creditor  between  the 
Warren  Association  and  the  United  States,  nor  did  the  United  States  ever  hold  a  note 
of  the  Association  it  could  put  in  suit. 

The  Warren  Association  Avas  a  private  company  of  individuals,  owning  a  large  real 
estate  in  South  Boston,  held  by  certain  gentlemen  in  trust  for  the  Association.  The 
Bank,  at  the  time  of  its  failure,  held  the  paper  of  the  Treasurer  of  the  Association, 
Mr.  Hood,  to  the  amount  of  $180,000.  Twenty  thousand  dollars  of  this  sum  was 
paid  after  the  failure,  which  reduced  the  debt  to  $160,000. 

The  origin  of  this  debt,  though  it  was  never  attempted  to  be  evaded  by  the  Asso- 
ciation or  any  of  its  members,  made  it  of  no  binding  legal  force  upon  the  Association 
or  its  individual  members,  because  it  was  contracted  without  a  vote  of  the  Associa- 
tion, in  violation  of  its  terms  of  agreement,  and  with  the  full  knowledge  on  the  part 
of  the  officers  of  the  Bank,  of  the  want  of  authority. 

So  far  from  availing  themselves  of  this  defect  in  authority,  the  Directors  of  the 
Association,  and  Mr.  Henshaw  in  particular,  were  at  all  times  ready  to  assume  it  as 
a  debt  between  them  and  the  Bank,  but  not  in  any  relation  to  the  United  States,  for 
none  such  existed. 

In  his  reply  to  the  report  of  the  Committee  of  the  Massachusetts  Legislature,  in 
February,  1838,  touching  their  investigation  into  the  affairs  of  the  Warren  Associa- 
tion, Mr.  Henshaw  said, — "  Before  going  further,  I  will  here  remark  that,  notwith- 
'  standing  the  obloquy  attempted  to  be  thrown  upon  the  Association,  by  the  committee 
'  and  others,  I  challenge  them  all  to  point  to  a  single  dishonest,  dishonorable  or  disre- 
'  putable  act,  justly  chargeable  upon  it.  It  is  true  that  a  debt  had  accumulated  in  its 
'  name  at  the  Commonwealth  Bank,  but  not  by  its  authority  nor  at  its  request,  for  $180,- 
000,  not  for  8263,000,  as  the  committee  have  falsely  stated.  Though  this  debt  was 
'  mostly,  if  not  entirely,  created  without  the  authority  of  the  Association,  and  it  does 
"  not  consider  itself  legally  bound  to  pay  it,  yet,  as  it  is  believed  that  those  who  created  it 


21 

"  acted  from  perfectly  honest  intentions,  no  attempt,  to  my  knowledge,  has  ever  been 
"  made  by  the  Association  to  evade  it" 

The  extent  of  the  debt  which  had  been  contracted  without  authority  of  the  Asso- 
ciation, was  made  known  at  a  meeting  of  the  Directors  of  the  Association,  in  Novem- 
ber, 1837,  and  though  much  surprise  was  felt  at  the  amount,  they  finally  authorized 
the  issue  of  three  notes  of  $25,000  each,  by  the  Treasurer,  on  time,  to  each  of  which 
was  appended  the  votes  of  the  Directors.  One  other  note  of  $25,000,  and  two  others 
of  $30,000  each,  were  subsequently  made,  in  all  $160,000,  on  time  from  seven  to 
sixteen  months,  and  it  was  then  agreed  that  these  notes  should  be  substituted  for  the 
memorandum  checks  and  short  paper,  which  the  Bank  held  upon  the  sole  voucher 
of  the  Treasurer  of  the  Association.  Before  this  was  carried  into  effect,  however,  the 
Bank  failed,  and  the  question  then  came  up  upon  the  exchange  of  this  paper  accord- 
ing to  the  previous  understanding. 

It  was  in  relation  to  the  exchange  of  these  notes  for  the  old  paper,  that  Mr.  Mills 
testified,  before  the  legislative  committee,  to  an  interview  between  himself  and  Mr. 
Henshaw,  which  testimony  has  been  attempted  to  be  distorted  into  an  imputation 
upon  him.  Mr.  Mills  was  applied  to,  to  sanction  that  negotiation,  solely  in  his 
capacity  of  Director  of  the  Commonwealth  Bank,  and  with  no  reference  whatever  to 
any  debt  due  the  United  States ;  for  at  that  time  no  suit  had  been  commenced  for  the 
United  States  against  the  Bank.  The  transaction  was  exclusively  between  the 
Warren  Association  and  its  creditor  the  Bank.  The  exchange  of  the  new  notes  on 
time,  for  the  Treasurer's  paper  was  authorized,  in  pursuance  of  the  previous  agree- 
ment of  November,  and  was  effected  on  the  15th  of  January,  the  day  of  the  first 
interview  testified  to  by  Mr.  Mills. 

At  this  time,  neither  Mr.  Henshaw  nor  Mr.  Mills  doubted  the  validity  of  the  new 
notes  ;  but  upon  subsequent  examination,  the  authority  of  the  Directors,  under  the 
terms  of  the  copartnership,  was  called  in  question,  as  affecting  the  binding  force  of 
those  notes  upon  the  stockholders,  who  contested  their  liability.  Mr.  Mills  after- 
wards had  a  conversation  with  Mr.  John  Pickering,  one  of  the  Trustees,  and  con- 
sulted eminent  counsel,  Mr.  B.  Rand,  and  came  to  the  conclusion  that  the  authority 
upon  which  the  new  notes  were  given  was  doubtful,  and  might  be  contested  by  the 
individual  stockholders,  in  the  event  of  a  suit  by  the  Bank  against  them  individually. 
It  was  in  the  course  of  the  discussion  as  to  the  individual  liability  of  the  stock- 
holders, that  the  suggestion  was  made  by  Mr.  Henshaw  to  Mr.  Mills,  that  even 
admitting  there  was  an  individual  liability,  the  result  of  a  suit  by  the  Bank  to  col- 
lect the  debt,  could  only  be  to  take  the  lands  of  the  Association  instead  of  the  per- 
sonal property  of  the  stockholders,  which  might  be  put  in  a  situation  to  have  no 
claim  upon  it.  Subsequent  investigations  prove  that  Mr.  Henshaw  was  correct  in 
the  view  he  took  of  the  doubtful  liability  of  the  stockholders,  and  this  whole  matter 
was  afterwards  fully  explained  by  Mr.  Mills,  in  his  communication  to  the  Solicitor 
of  the  Treasury,  of  September  15,  1838,  which  will  hereafter  be  referred  to  for 
another  purpose.  [See  Appendix  G.J 

Mr.  Mills  there  says :  "  At  the  time  the  legislative  committee  made  their  investi- 

"  gation,  I  was  of  the  opinion  that  the  associates  were  personally  responsible  for  the 

"  notes,  (that  is,  to  the  Bank.)     But  facts  were  soon  after  disclosed,  or  came  to  my 

"  knowledge,  that  very  much  diminished  my  confidence  in  that  opinion.     As  a  gene- 

"  ral  principle,  all  the  members  of  a  joint  stock  association  are  personally  responsible 

"  for  the  debts  of  the  company.     But  in  this  case,  I  was  well  satisfied,  on  examinrt- 

"  tion,  that  the  officers  of  the  Association  were  prohibited  from  borrowing  money  or 

incurring  debts  beyond  the  sum  of  thirty  thousand  dollars.     Such  restriction  it  is 

not  supposed  would  avail  to  defeat  the  claim  of  a  creditor  who  had  no  notice  of  it. 

But  all  these  notes  were  taken  by  the  Commonwealth  Bank,  with  full  notice  that 

the  Treasurer  of  the  Association  had  no  authority  to  contract  the  debt.     I  do  not 

pretend  that  a  recovery  against  the  Association  was  entirely  hopeless,  but  I  do  say, 

that  it  was  so  very  doubtful  that  no  prudent  man,  standing  in  the  same  relation, 

would  have  sought  his  remedy  by  a  law-suit,  if  he  could  receive  his  debt  in  lands 

at  an  appraisal." 

The  same  legal  opinion  was  subsequently  given  by  Hon,  Rufus  Choate,  who,  at 


22 

the  request  of  the  Solicitor  of  the  Treasury,  was  designated  by  Mr.  Bancroft,  the 
successor  of  Mr.  Henshaw  in  the  Collector's  office,  as  counsel  to  be  consulted  in 
behalf  of  the  United  States.  In  his  communication  to  the  Solicitor,  of  Nov.  22d, 
1838,  Mr.  Choate  says  on  this  point : 

"  I  consider  the  question,  whether  the  Commonwealth  Bank  could  enforce  the 

'  notes  signed  by  the  Treasurer  of  the  Warren  Association,  as  attended  with  great 

'  difficulty.     The  highest  professional  opinions  were  divided  upon  it.     The  agents 

'  of  the  Association,  who  executed  and  delivered  the  notes  to  the  Bank,  exceeded 

their  authority  in  that  act,  and  the  agents  of  the  Bank  who  received  the  notes  and 

'  made  the  advances  on  them,  were  perfectly  conusant  of  this  excess  of  authority 

of  the  agents  of  the  Association.      They  were  so  because  they  were  themselves 

officers  in  the  Association  and  in  the  Bank.     The  stockholders  in  the  Association 

'  had  determined  to  contest  their  liability,  and  would  have  been  charged,  if  at  all,  at 

'  the  end  of  a  very  long  and  expensive  litigation.     The  sureties  of  the  Common- 

'  wealth  Bank,  who  received  these  notes  from  the  Bank,  stood  upon  no  higher  equity 

'  than  the  party  from  whom  they  received  them,  and  would  have  had  the  same  diffi- 

'  culty,  precisely,  in  enforcing  them  against  the  Association."     [See  Appendix  H.] 

But  in  addition  to  this  legal  uncertainty,  the  notes  of  the  Warren  Association, 
Whether  binding  or  not  on  the  stockholders,  were  like  any  other  negotiable  paper, 
held  by  the  Bank  from  its  debtors,  on  time,  transferable  at  any  moment  to  any  of 
the  creditors  of  the  Bank ;  and  there  was  no  process  by  which  the  United  States 
could  reach  them.  Some  of  them  had  sixteen  months  to  run,  and  none  less  than 
seven,  and  if  the  United  States  had  waited  for  its  share  of  the  proceeds  of  these 
notes,  when  reduced  to  assets  of  the  Bank,  either  by  the  Bank  itself  or  its  receivers,  it 
must  not  only  have  run  the  risk,  in  the  mean  time,  of  a  transfer  to  others,  a  settle- 
ment, or  even  the  failure  of  the  Bank  to  hold  the  Association  after  a  contested  suit 
on  the  grounds  of  their  defence ;  but  had  the  Bank  or  its  receivers  succeeded  in 
getting  a  judgment  against  the  Association,  the  avails  would  have  been  realized,  after 
all,  in  an  appraisement  of  these  same  South  Boston  lands,  set  off  on  execution ; 
which  would  have  been  doing,  at  great  risk  and  cost,  just  what  was  done,  in  the  final 
adjustment,  without  either. 

And  in  this  connexion  it  may  be  proper  to  correct  the  false  view  of  many,  as  to 
the  priority  claim  of  the  United  States.  The  notion  seems  to  be  held  by  some  who 
complain  in  this  matter,  that  the  moment  the  Bank  failed,  the  United  States  could 
walk  in  and  apply  all  the  assets,  negotiable  or  otherwise,  to  the  discharge  of  its  debts. 
This  is  not  so.  The  United  States  stands  like  any  other  creditor,  until  it  obtains 
judgment  against  its  debtor,  and  even  then,  its  priority  claim  to  the  debtor's  effects 
applies  only  where  by  law,  or  by  the  act  of  the  debtor  himself,  his  property  is  seques- 
tered for  the  use  of  his  creditors,  and  not  where  there  is  mere  insolvency  or  an  indi- 
vidual attachment  of  the  debtor's  goods.  And  if,  before  the  right  of  preference 
accrues  to  the  United  States,  the  debtor,  bona  fide,  conveys  his  estate,  or  mortgages 
it  to  secure  a  debt,  the  debtor  is  divested  of  his  property,  and  it  is  not  liable  to  the 
United  States. 

The  United  States,  therefore,  stood  in  the  same  relation  to  the  Bank,  as  to  its 
negotiable  paper,  as  did  any  other  creditor,  and  no  better.  It  had  claims  against  it 
for  8338,797.  Of  this,  $146,476  were  deposits  to  the  credit  of  its  officers,  for  which 
it  had  no  claim  on  them,  and  the  remainder,  S192,321,  rested  upon  the  Bank  and  its 
sureties,  as  did  in  fact  the  whole  sum.  The  only  security  the  United  States  held 
Was  the  deposit  contract  entered  into  by  the  Bank  July  15,  1836,  "  to  discharge  all 
the  duties  and  services  prescribed  by  the  act  of  the  23d  of  June,  1836,"  and  a  sub- 
sequent bond,  executed  by  the  President  and  Cashier  of  the  Bank,  Feb.  14th,  1837 ; 
upon  which  bond  Hall  J.  How,  Otis  Rich,  John  Henshaw.  Elisha  Parks,  F.  S. 
Carruth,  William  Freeman,  Oliver  Fletcher,  Adams  Bailey,  and,  we  believe,  S.  S. 
Lewis,  were  sureties,  for  the  performance  of  the  deposit  contract  of  July  15.  1836. 
The  sureties  on  this  bond  contested  their  liability  on  the  ground  that  the  bond  was 
not  duly  executed  ;  and  they  further  contended,  that  if  the  bond  were  valid  they  wrere 
liable  for  no  more  than  the  balance  of  deposits  remaining  when  the  Bank  suspended 
and  was  notified  of  its  removal  as  a  depository,  May  18lh,  1837.  That  such  was 


23 

the  legal  force  of  these  instruments  and  no  more,  will  be  seen  by  the  opinions  of 
eminent  counsel,  to  whom  the  matter  was  referred  by  the  Solicitor  of  the  Treasury, 
who  fully  concurred  in  that  opinion,  and  which  no  lawyer  has  ventured  his  reputa- 
tion to  call  in  question.  [See  Appendix  J.] 

The  balance  for  which  the  sureties  were  holden,  on  the  18th  of  May,  1837,  upon 
this  construction  of  the  contract,  was  stated  at  $106,640,  which  amount  was  placed 
there  previous  to  the  removal  of  the  Bank  as  a  depository,  but  from  this  amount  was 
to  be  deducted  $49,389  06  for  over  draft  on  Pension  Agent's  account,  leaving  only 
$57,251  for  which  the  sureties  could  in  any  event  have  been  held  liable. 

And,  in  point  of  fact  and  law,  the  United  States  had  no  security,  beyond  the  assets 
of  the  Bank,  but  for  this  sum.  The  negotiable  paper  held  by  the  Bank  of  its  debtors, 
could  not  be  attached  by  the  United  States  nor  the  debtors  trusteed,  because  "  no 
person  can  be  adjudged  a  trustee  by  reason  of  having  drawn,  accepted,  made  or 
endorsed  any  negotiable  bill,  note  or  other  security." 

Until  receivers  were  appointed,  the  Bank  could  dispose  of  its  negotiable  paper  as 
it  might  see  fit.  That  this  paper  did  not  go  into  the  hands  of  other  creditors,  instead 
of  being  made  available  to  the  United  States,  was  mainly  owing  to  the  exertions  of 
David  Henshaw,  S.  S.  Lewis,  and  one  or  two  of  the  Directors,  as  will  be  seen  by 
reference  to  the  letter  of  Mr.  Lewis,  concurred  in  by  Robert  G.  Shaw,  Esq.  [Ap- 
pendix No.  11.] 

The  Commonwealth  Bank  was  indebted  to  the  associated  Boston  banks  $205,000, 
and  in  fact  negotiations  had  been  started  to  deliver  to  them  the  securities,  which, 
instead  of  that  disposition,  were  made  available  to  the  United  States,  mainly  through 
Messrs.  Henshaw  and  Lewis. 

It  is  not  a  little  remarkable  that  the  whole  of  the  censure  which  has  been  lavished 
upon  David  Henshaw,  is  based  chiefly  upon  the  very  proceedings  which  enabled  the 
United  States  to  realize  these  securities,  and  obtain  satisfaction  of  its  whole  debt, 
instead  of  being  left,  as  it  otherwise  would,  to  the  claim  of  $57,000  upon  the  sure- 
ties, and  the  doubtful  proceeds  of  the  effects  of  the  Bank. 

An  attempt  was  made  by  private  creditors  of  the  Bank  to  divert  these  securities 
from  the  United  States.  The  failure  of  that  suit,  and  the  disposition  made  of  the 
funds,  will  be  seen  by  the  answer  of  Mr.  Lewis,  who  was  sued  as  Trustee.  [Ap- 
pendix No.  12.] 

The  legal  proceedings  instituted  on  the  part  of  the  United  States,  by  direction  of 
the  Treasury  Department,  to  recover  the  claim  against  the  Bank  of  three  hundred 
and  thirty-eight  thousand  dollars,  were  as  follows: 

Under  instructions  from  the  Treasury  Department,  on  the  22d  of  January,  1838,  a 
suit  was  commenced  by  the  District  Attorney  against  the  Bank,  and  the  sureties  on 
the  bond  of  February  14th,  1837,  to  recover  a  balance  then  stated  in  a  Treasury 
Transcript  sent  by  the  Solicitor  to  the  District  Attorney,  as  due  from  the  Bank  to  the 
United  States  of  $51,749  90. 

The  District  Attorney,  entertaining  a  legal  doubt,  which  subsequently  proved  well- 
founded,  whether  an  action  would  lie  against  the  Bank,  upon  the  above  bond,  com- 
menced, at  the  same  time,  an  action  against  the  Bank  for  money  had  and  received ;  a 
measure  of  precaution  which  evinced  the  professional  fidelity  of  that  officer.  Upon 
these  two  writs  of  January  22d,  the  officers  of  the  Bank  delivered  to  the  District 
Attorney,  as  security  for  the  claims,  the  paper  of  the  Bank  to  the  amount  of  $42,420, 
viz.,  notes  of  J.  Henshaw  and  Henshaw,  Ward  &  Co.,  endorsed  by  D.  Henshaw,  for 
$27,420,  not  due,  and  a  note  of  How  and  Jones  for  $15,000,  also  on  time.  The 
Treasury  Transcript  stated  the  balance  at  $51,749  90,  but  it  was  in  fact  but 
$39,636  93. 

These  notes  were  subsequently  paid,  dollar  for  dollar,  and  the  United  States  received 
the  proceeds,  in  the  final  settlement.  The  receipt  given  for  them  on  the  22d  of 
January,  shows  that  they  were  hold  solely  for  security  of  the  balance  named  in  the 
Treasury  Transcript  upon  the  writ  of  that  date.  [See  Appendix  D,  Note  a.]  In  this 
respect  there  is  an  error  in  the  report  of  the  committee  of  the  Legislature,  (page  34,) 
which  mentions  but  one  suit  against  the  Bank,  when  in  fact  there  were  three.  The 
error,  however,  is  not  material.  Suits  were  also  commenced  against  the  sureties  of 


24 

John  K.  Simpson,  on  his  pension  bonds  of  January  30,  1834,  and  February  12, 
1836. 

On  the  30th  of  January,  upon  further  instructions  from  the  Treasury  Department, 
separate  suits  were  commenced  against  each  of  the  sureties  on  the  deposit  bond,  with 
directions  to  the  Marshal  to  attach  sufficient ;  and  on  the  13th  of  February,  an  action 
was  brought  against  the  Bank  on  its  deposit  contract,  upon  which  writ  all  the  real 
estate  belonging  to  the  Bank,  was  attached.  A  bill  in  equity  was  also  filed  against 
the  debtors  of  the  Bank.  It  is  proper  to  state  that  each  of  these  suits  was  promptly 
brought  by  the  District  Attorney,  immediately  upon  his  being  furnished  with  the 
contracts  upon  which  they  were  declared. 

We  now  come  to  the  first  act  of  David  Henshaw  which  connected  the  notes  of  the 
Warren  Association  indirectly  with  the  claims  of  the  United  States  upon  the  Bank. 
It  will  be  recollected  that  he  was  not  a  party  to  these  or  any  suit  ever  commenced  by 
the  United  States  to  recover  its  claims  upon  the  Commonwealth  Bank.  Ample 
security  had  been  given  to  the  District  Attorney  for  the  balance  upon  the  Treasury 
Transcript  of  $39,636,  which  in  fact  reduced  the  claim  against  the  deposit  sureties  to 
$17,615.  After  the  service  of  the  writs  against  the  sureties,  the  Directors  of -the  Bank, 
by  vote,  placed  notes,  to  the  nominal  amount  of  $280,000,  in  the  hands  of  the  sureties, 
"  to  protect  the  said  sureties  against  all  legal  liabilities  to  the  United  States  on 
account  of  said  Bank."  These  securities  were  placed  by  the  sureties  in  the  hands 
of  David  Henshaw  and  Samuel  S.  Lewis  as  trustees,  for  the  above  purpose,  and 
were  by  them  delivered  to  the  Marshal  upon  the  writs  against  the  several  sureties  on 
the  deposit  bond,  for  the  sole  and  express  purpose  set  forth  in  the  Marshal's  receipt 
therefor,  of  February  2,  1838,  to  be  held  by  him  "  as  security  to  satisfy  any  judg- 
ment which  may  be  recovered  in  favor  of  the  United  States,  (on  the  said  writs  of 
January  30,  against  the  several  sureties  upon  the  deposit  bond,)  the  balance,  after 
satisfying  such  judgments,  if  obtained,  to  be  returned  to  said  Lewis  and  Henshaw." 
[For  the  Marshal's  receipt  and  schedule  of  notes,  see  Appendix  D,  Note  d.] 

These  notes  were  all  on  time,  and  could  not  have  been  attached  by  the  Marshal ; 
they  never  came  into  the  hands  of  the  District  Attorney  >  and  the  United  States  had 
no  claim  upon  them,  except  as  collateral  to  be  applied  as  above,  in  case  the  United 
States  recovered  judgment  in  the  contested  suits  against  the  sureties  ;  and  they  could 
not  be  applied  to  any  judgment  or  demand  against  the  Bank.  Among  these  securi- 
ties were  the  six  notes  on  time,  of  the  Warren  Association  to  the  Bank,  amounting 
to  $160,000,  and  this  is  the  only  claim  the  United  States  ever  had  upon  them ;  and 
even  these  notes,  thus  held  as  collateral  for  a  specific  purpose,  were  contested  by  the 
Warren  Association  upon  grounds  already  stated. 

Had  the  matter  rested  here,  no  pretext  could  be  raised  against  the  proceedings,  as 
in  all  respects  honorable  and  extremely  favorable  to  the  United  States.  But  if  the 
parties  had  so  been  left  to  pursue  their  legal  remedies,  the  most  favorable  result, 
which,  in  any  possible  event,  the  United  States  could  realize,  would  have  been  a 
recovery  of  judgment  against  the  sureties  for  the  deposit  balance  in  Bank,  May  18, 
1837,  of  $57,251,  less  $38,636,  already  secured  under  the  suit  of  January  22d,  with 
the  contingency  of  the  recovery  in  a  suit  in  the  name  of  the  Bank,  against  the 
Warren  Association,  upon  these  contested  notes.  Instead  of  this,  by  the  arrange- 
ments subsequently  made,  the  United  States  had  set  off  to  it,  on  execution,  the  South 
Boston  lands ;  and  no  man,  however  extravagant  he  may  be  in  depreciating  those 
lands,  will  venture  to  place  them  at  a  less  value  than  the  whole  amount  it  is  obvious 
the  United  States  would  have  recovered,  had  it  pursued  all  its  legal  remedies  to  their 
final  results. 

It  was  at  this  point,  and  under  these  circumstances,  that  the  adjustment  was  made, 
not  by  David  Henshaw,  but  by  the  officers  of  the  United  States,  under  advisement 
with  the  department,  and  in  due  course  of  law,  which  led  to  the  transfer  to  the  United 
States  of  the  South  Boston  lands.  As  has  been  well  said,  by  one  of  the  ablest  law 
officers  of  the  government  at  Washington,  this  settlement  is  not  to  be  regarded  in  the 
light  of  a  compromise,  but  as  the  result  of  legal  proceedings,  the  most  favorable  to  the 
United  States  that  could  have  been  obtained  under  all  the  circumstances. 

The  proceedings  of  the  law  officers  of  the  government,  in  relation  to  the  notes  of 


25 

the  Warren  Association,  are  minutely  set  forth  in  the  full  report  of  the  District 
Attorney  to  the  Solicitor  of  the  Treasury ;  for  which,  see  Appendix  D.  With  the 
concurrence  of  the  Solicitor,  the  agreement  referred  to  in  that  report,  (Note  b,)  was 
made,  May  11,  1838,  between  the  Bank  and  the  sureties,  and  the  District  Attorney. 

By  that  agreement  judgment  was  to  be  rendered  for  the  United  States  against  the 
Bank,  for  the  whole  balance  claimed  and  interest,  $335,517  55.  The  Marshal  was 
to  levy  the  execution  upon  the  lands  of  the  Warren  Association,  which  were  to  be 
conveyed  by  them  to  the  Bank,  and  the  same  were  to  be  set  off,  upon  the  levy,  by 
appraisement,  in  the  legal  mode  of  taking  the  land  of  individuals  or  unincorporated 
companies.  The  amount  of  such  appraisal  was  to  be  appropriated,  (in  conformity  to 
the  conditions  upon  which  the  Marshal  held  the  notes  of  the  Warren  Association,)  to 
the  relief  of  the  sureties  of  the  Bank  on  the  deposit  bond  of  February  14, 1837,  to  the 
extent  of  such  appraisement ;  and  the  notes,  held  by  the  Marshal  under  his  receipt  of 
February  2,  1838,  upon  the  several  writs  against  the  sureties,  were  to  be  surrendered 
to  the  Trustees  of  the  Warren  Association,  to  the  amount  of  said  appraisement,  and 
the  remainder  retained,  after  the  completion  of  the  levy. 

At  the  next  term  of  the  Court,  judgment  was  entered  as  above,  and  appraisers  were 
appointed  in  conformity  to  the  laws  of  Massachusetts,  the  Warren  Association  having 
simultaneously  conveyed  the  lands  to  the  Bank. 

The  selection  of  the  appraisers  was  such  as  no  man  who  is  conscious  of  deserving 
self-respect,  would  call  in  question,  in  this  community.  They  were,  on  the  part  of 
the  United  States,  Nathan  Gurney,  then  a  State  Senator  and  Alderman  of  the  city, 
James  C.  Merrill,  one  of  the  Justices  of  the  Police  Court  of  Boston;  and  on  the  part 
of  the  Bank,  Amos  Binney,  a  representative  in  the  State  Legislature.  There  are  few 
citizens  in  Boston,  who  would  not  have  been  satisfied  with  the  appointment  of  these 
gentlemen  as  appraisers  on  their  own  estates.  And  here  is  the  point  to  which  all  the 
charges  against  David  Henshaw,  or  the  law  officers  of  the  government  must  come, 
viz.,  that  by  collusion,  corruption  and  perjury,  these  three  unimpeachable  citizens 
purposely  appraised  the  land  at  an  exorbitant  value,  with  the  intent  to  defraud  the 
United  States  !  for  if  the  land  had  been  appraised  under  its  value,  there  would  be  no 
pretext  of  complaint,  and  the  United  States  would  have  gained,  at  the  expense  of  the 
Association. 

To  cover  the  baldness  of  this  charge,  it  has  been  pretended,  by  the  accusers  of  Mr. 
Henshaw,  that  the  appraisers  made  two  valuations,  one  to  ascertain  how  much  land 
the  Association  was  to  deed  to  the  Bank,  and  the  second  (which  was  under  their 
oaths)  merely  pro  forma,  and  that  they  fixed  upon  the  price  understood  to  have  been 
agreed  on  by  the  parties. 

This  is  only  another  form  of  charging  them  with  collusion  and  perjury,  for  they 
knew  the  law  and  their  duty  under  it.  This  charge  was  met  and  prostrated  in  its 
origin,  as  will  be  seen  from  a  correspondence  between  Mr.  Mills  and  the  appraisers, 
of  September  8  and  14,  1838,  [for  which,  see  Appendix  B.  G.] 

Upon  private  representations  made  to  the  Solicitor  of  the  Treasury,  inquiries  were 
made  of  the  appraisers,  to  which  they  answered,  that  they  never  made  but  one 
valuation,  and  that  upon  the  land,  under  their  oaths ;  that  they  did  not  examine  the 
lands  for  the  purpose  of  making  a  valuation  before  they  were  sworn  ;  that  they  never 
heard  of  any  appraisement  of  the  lands  being  made  when  they  were  conveyed  to  the 
Bank,  and  knew  nothing  of  the  consideration  in  the  deed  of  the  Warren  Association 
to  the  Bank ;  and  that  they  knew  of  no  intention  to  appoint  them  appraisers,  until 
they  were  notified  of  their  appointment.  And  they  further  say  that  they  did  not 
know  of  their  being  selected  as  appraisers  until  about  an  hour  before  they  were 
sworn ;  nor  until  sworn,  did  not  know  the  parties  or  the  property ;  that  they 
proceeded  to  view  the  premises  immediately  after  taking  the  oath,  and  when 
making  the  appraisement  did  not  know  the  amount  due  from  the  Warren  Association 
to  the  Bank. 

There  is  consequently  no  pretence  that  the  appraisers  were  misled  by  any  sup- 
posed understanding  of  the  parties  as  to  the  value  of  the  lands ;  and  if  they  made  a 
false  appraisal  it  was  designedly  and  corruptly,  and  in  no  other  way.  And  to  show 
the  enormity  of  the  charge  which  is  made  upon  the  integrity  of  these  citizens,  in 


26 

order  to  assail  David  Henshaw  through  them,  we  will  cite  the  oath  they  took,  &S 
endorsed  on  the  execution. 

"  United  States  of  America — District  of  Massachusetts, 

"  Suffolk,  ss. — Boston,  May  17, 1833.  Then  and  there  personally  appeared  before 
v  me,  James  C.  Merrill,  Amos  Binney,  and  Nathan  Gurney,  and  made  oath  that  they 
"  \vo\i\A.  faithfully  and  impartially  appraise  the  real  estate  taken  on  the  within  execu- 
"  tion  in  favor  of  the  United  States  of  America  against  the  President,  Directors  and 
"  Company,  of  the  Commonwealth  Bank.- 

"JOHN  GRAY  ROGERS, 

Justice  of  the  Peace." 

And  in  their  return  upon  the  execution,  the  appraisers  say,  under  their  hands : 

"  We,  the  subscribers,  having  been  duly  sworn,  have  this  day  entered  upon  and 
w  viewed  the  following  described  parcels  of  land,  &c.  And  we  appraise  the  before 
"  described  premises  at  the  sum  of  $166,437  9'0,  in  part  satisfaction  of  the  said  exe-' 
"  cution." 

Much  stress  has  been  laid  upon  the  fact,  that  the  conveyance  of  the  land  (o  the? 
Bank  was  simultaneous  with  the  levy,  and  that  the  whole  return  was  accomplished 
On  the  same  day,  and  also  that  on  the  day  after  the  levy,  the  Bank  executed  a  deed 
to  the  United  States  !  The  first  objection  is  wholly  immaterial,  because  the  convey- 
ance and  levy  were  dependant  on  each  other,  under  the  agreement  to  that  effect,  and 
the  time  was  ample  for  the  appraisement  arid  return ;  and  the  last  was  a  prudent 
measure  of  precaution  on  the  part  of  the  District  Attorney,  to  secure  the  title  to  the 
Uriited  States  against  any  possible  error  in  the  returns,  which  so  often  defeat  the1 
technical  title  under  an  execution. 

With  this  appraisement  and  payment  of  the  debt  of  the  Warren  Association,  all 
pretended  connection  of  David  Henshaw  with  the  alleged  "land  fraud  at  South 
Boston,"  ends.  And  where  can  malevolence  find  a  particle  of  fraud  or  dishonesty  to" 
soil  his  reputation  with  ?  A  stab,  to"  reach  him,  must  pass-  through  a  powerful  array 
of  men  who  surround  him,  in  this  transaction,  and  all  of  whom  he  must  have  duped 
or  bribed  to  accomplish  his  purpose  ! 

And  to  what  end?  We  have  seen  it  gravely  calculated  a'nd  figured  out  m  a 
newspaper,  which  has  been  the  most  active  in  the  attacks  upon  Mr.  Hetishaw,  and 
which  boasted  of  having  defeated  his  confirmation  m  the  Senate,  by  exposing  this 
"  stupendous  land  fraud,"  tha't  David  Henshaw's  part  of  the  plunder,  by  paying  off* 
the  debt  of  the  Warren  Association  in  this  way,  would  actually  amount  to  $6,200  • 
and  out  of  this  sum  he  must  have  bought  up  Messrs.  Choate  and  Mills,  the  counsel 
for  the  United  States,  and  bribed  the  appraisers  to  forswear  themselves ! 

It  has  been  repeatedly  asked,  why  Mr.  HenshaXv  has  not  long  ago  demanded  art 
investigation  into  these  charges.  The  answer  is  that  the  investigation  has  been 
repeatedly  made  by  the  government,  and  submitted  to  Congress,  and  with  a  uniform 
result  honorable  td  hirri,  and  to  the  District  Attorney,  and  to  the  parties  concerned* 
To  these  several  investigations,  has  recently  been  added,  Mr.  Henshaw's  call  upon 
the  Senate  of  Feb.  14,  1844,  for  an  exhibit  of  the  charges  against  hint. 

It  is  only  necessary  to  bring  together  the  repeated  examinations  that  have  been 
held  officially  in  this  matter,  but  which,  Avith  the  documents,  have  heretofore  been 
much  scattered  and  disconnected,  to  shtfw  how  completely  every  allegation  touching 
David  Henshaw  or  Mr.  Mills,  or  any  party  concerned  in  that  adjustment,  has  been 
met  and  answered  to  the  satisfaction  of  all  the  law  officers  of  the  government,  and 
tff  more  than  two  committees  of  Congress. 

The  setting  off  of  the  South  Boston  lands,  was  in  May,  1838.  The  12th  of  July 
following,  Mr.  Woodbury,  the  Secretary  of  the  Treasury,  was  informed,  at  the  sug- 
gestion of  Mr.  William  Wright,  of  Boston,  that  the  government  had  suffered,  by  the 
alleged  or  suspected  misconduct  of  its  officers,  in  the  matter  of  the  South  Boston  land*. 
At  the  same  time  an  article  appeared  in  the  Boston  Times,  making  charges  of  miscon- 
duct. The  matter  was  referred  to  the  Solicitor,  Mr.  Gilpin,  who  wrote  to  the  District 
Attorney,  [see  Appendix,  A,]  and  received  the  full  and  explicit  answer  given  by  that 


97 

officer,  [for  which,  see  Appendix  B,]  and  the  further  minute  report  of  all  the  pro- 
ceedings, [for  which,  see  Appendix  D.] 

This  was  satisfactory  to  the  law  officers,  but  not  to  Mr.  Wright,  and  on  the  3d  of 
August,  1838,  he  addressed  a  memorial  to  Mr.  Gilpin,  describing  what  he  there 
termed  this  "  stupendous  cheat,"  [Appendix  E,]  and  indirectly  censuring  the  Presi- 
dent and  the  Department  for  not  making  an  example  of  the  alleged  delinquents.  This 
is,  in  fact,  the  articles  of  impeachment  in  the  investigation. 

The  Solicitor,  upon  learning,  on  inquiry,  that  this  document  was  intended  as  offi- 
cial, proceeded  to  a  thorough  investigation.  The  views  entertained  by  the  accuser, 
and  the  want  of  confidence  intimated  in  the  integrity  of  the  President,  Mr.  Van  Bu- 
ren,  who  did  not  escape  censure  from  that  quarter,  may  be  seen  by  his  letter  in  the 
Appendix,  marked  R. 

July  21,  1S3S,  the  Solicitor  applied  to  the  Collector  at  Boston,  Mr.  Bancroft,  for 
the  recommendation  of  counsel  to  be  employed  by  the  government  in  the  investiga- 
tion, and  that  gentleman  immediately  recommended  the  Hon.  Rufus  Ch.oa.te ;  anoT  at 
the  same  time,  Mr.  Bancroft,  with  honor  to  himself,  said  to  the  Solicitor,  in  reply, 
•"  the  personal  purity  and  integrity  of  Mr.  Mills  need  no  voucher." 

Mr.  William  Wright's  articles  of  impeachment,  of  August  3,  1838,  were  referred 
to  Mr.  Mills  by  the  Solicitor,  and  met  the  extinguishing  fate  which  followed  them^ 
in  the  clear  and  caustic  reply  of  the  District  Attorney,  of  Sept.  15,  1838,  [for  which; 
see  Appendix  G.] 

This  was  followed  by  the  formal  written  opinion  of  Mr.  Choate  upon  the  question 
submitted  to  him  by  the  Solicitor,  as  to  the  correctness  of  the  proceedings  in  the  con- 
veyance of  the  South  Boston  lands  to  the  United  States ;  [for  which  opinion  of  Mr. 
Choate,  see  Appendix  H.] 

Mr.  Choate  there  says, — "  The  result  to  which  I  have  arrived  is,  that  the  arrange- 
•"  ment  entered  into  by  Mr.  Mills,  was,  under  the  embarrassing  circumstances  of  the 
"  case,  a  judicious  arrangement  for  the  government,  entered  into  in  the  purest  offi- 
"  cial  good  faith,  in  the  exercise  of  a  sound  discretion." 

The  Solicitor  was  again  fully  satisfied  with  these  explanations,  and  there  the  mat- 
ter rested.  But  the  zeal  of  the  accuser  was  not  cooled.  The  Department  not  being 
willing  to  take  the  false  facts  and  bad  law  of  the  accuser,  he  applied  to  Congress, 
and,  on  the  14th  of  January,  1839,  the  House  voted  a  call  upon  the  Secretary  of  the 
Treasury,  for  information  comprising  all  matters  connected  with  the  settlement  in 
question.  Mr.  Woodbury  referred  the  inquiry  to  the  Solicitor  of  the  Treasury,  who, 
on  the  25th  of  January,  1839,  replied  with  a  full  explanation  of  the  facts  and  his 
views,  which  cover  the  whole  ground  of  inquiry.  In  his  letter,  the  Solicitor  answers 
•every  essential  position  taken  by  Mr.  Wright.  He  says,—"  The  grounds  of  the 
•"  allegations  are  that  the  United  States  should  have  proceeded  against  the  individual 
*'  members  of  the  Warren  Association;  that  the  real  estate  should  have  been  sold,  and 
*'  not  extended  under  the  execution  ;  that  the  appraisement  was  unfair,  if  not  fraudu- 
"  lent ;  and  that  the  agreement  made  by  the  District  Attorney  was  an  improper  compro- 
"'  mise  of  the  rights  and  interests  of  the  United  States.  These  allegations,  (says  the 
**  Solicitor,)  are  founded  on  error  as  to  facts."  And  he  adds,  "  that  at  no  time  has  it 
"  been  in  the  power  of  the  United  States  to  proceed  against  the  members  of  the  War- 
•"  ren  Association  ;  that  no  proceedings  could  be  instituted  by  the  United  States,  on 
"  the  notes  of  that  Association ;  that  the  real  estate  was  extended  instead  of  being 
*'  sold,  because  in  no  other  manner  could  it  have  been  made  available  to  the  United 
•"  States  ;  that  it  was  not  the  property  of  the  Bank,  and  never  would  have  been  con- 
"  veyed  to  it,  so  as  to  be  liable  to  execution,  except  under  the  agreement ;  and  that  to 
"  have  done  otherwise,  would  have  been  to  grant  to  the  United  States  better  terms 
•"  than  it  could  have  gained  had  it  succeeded  in  a  very  doubtful  and  complicated  legal 
*l  controversy."  And  in  conclusion,  Mr.  Gilpin  says, — "  Reviewing  all  the  facts  of 
"  the  case,  as  they  have  come  to  my  knowledge  after  full  inquiry,  no  hesitation  existed 
"  or  does  exist,  on  my  part,  in  expressing  approbation  of  the  course  taken,  as  that  which, 
"  under  the  circumstances,  was  proper,  in  a  legal  point  of  mew,  and  decidedly  best  for 
"  the  interests  and  ultimate  security  of  the  United  States." 

This  ample  rofutation  of  the  whole  charges  about  the  "  land  fraud"  was  commui 


nicated  to  Congress  by  Mr.  Woodbury,  the  Secretary  of  the  Treasury,  and  published 
by  order  of  the  House,  [Doc.  No.  120,  25th  Congress,  3d  Session,  House  of  Rep. 
See  Appendix  I.] 

Here  were  three  official  examinations  of  this  matter,  all  resulting  in  the  justifica- 
tion and  approval  of  the  parties  concerned.  But  this  did  not  satisfy  the  accuser, 
and  he  again  applied  to  the  Solicitor,  in  July,  1839,  not  for  a  further  investigation, 
but  for  the  names  of  those  alluded  to,  but  not  mentioned,  in  Mr.  Gilpin's  report  whom 
he  suspected  as  the  sources  of  information  relied  upon  in  giving  the  transaction  his 
official  sanction.  In  this  letter  Mr.  Wright  complains  "  that  the  representations 
which  he  had  made,  concerning  the  matter,  have  been  discredited  and  set  doivn  as 
false."  [Appendix  K.] 

This,  we  believe,  led  to  no  action.  In  1840,  however,  a  further  attempt  to  revive 
the  charges,  was  made  through  the  appointment  of  a  select  committee  of  the  House 
of  Representatives,  upon  "  a  memorial  of  William  Wright."  The  chairman  of  this 
committee  was  Hon.  W.  K.  Bond,  a  distinguished  whig  member  of  the  House  from 
Ohio. 

Mr.  Bond  applied  to  the  Secretary  of  the  Treasury,  for  facts  and  explanations, 
who  referred  the  inquiries  to  the  then  Solicitor  of  the  Treasury,  Hon.  Matthew 
Birchard ;  and  this  new  legal  officer,  with  no  prepossessions  in  the  matter,  proceeded 
to  answer  the  call.  His  reply  of  May  25th,  1S40,  is  full,  explicit,  and  direct  to  the 
point,  [for  which  see  Appendix  L.] 

He  there  says,  "  A  difference  of  opinion  about  the  value  of  a  piece  of  property  in 
"  a  city  of  the  size  of  Boston,  is  but  poor  matter  of  evidence  to  sustain  any  such  im- 
"  putation,  or  in  fact  any  imputation  touching  the  integrity  of  men  of  fair  char- 
"  acter  ;"  and  he  adds  : 

"  In  conclusion,  I  feel  myself  constrained  to  say,  after  the  most  careful  examina- 
"  tion  of  the  whole  correspondence,  that  the  course  of  proceedings  adopted  by  the 
"  law  officers  of  the  government,  (though  attended  with  great  and  serious  responsi- 
"  bility,  from  which  they  did  not  shrink,)  was  strictly  justifiable  in  a  legal  point  of 
"  view ;  and  that  I  cannot  find  in  the  evidence  anything  whatever  to  sustain  the 
"  charge  that  their  motives  ivere  incorrect,  or  that  there  has  been,  in  any  step  taken  ly 
"  them,  any  official  impropriety,  much  less  the  slightest  ground  for  charging  them 
"  with  fraud. 

"  (Signed,)     M.  BIRCHARD, 
"Solicitor  of  the  Treasury.'" 

The  select  committee  of  Congress  were  satisfied,  and  took  no  further  action  upon 
the  subject. 

Here  are,  in  effect,  four  official  investigations,  two  of  which  have  been  laid  before 
Congress  and  silently  approved.  And  the  whole  documents  show,  that  every  officer 
of  the  government,  who  has  been  applied  to  on  this  subject,  including  the  then  Presi- 
dent, Mr.  Van  Buren,  the  Secretary  and  the  two  Solicitors  of  the  Treasury,  one  of 
whom,  Mr.  Gilpin,  was  afterwards  Attorney  General ;  has  approved  of  the  whole 
transaction  in  what  is  called  the  "  South  Boston  land  fraud,"  and  set  aside,  as  wholly 
unfounded,  every  allegation  of  fraud,  or  misconduct,  which  it  has  so  pertinaciously 
been  attempted  to  fasten  upon  the  parties. 

The  recent  acceptance  of  the  office  of  Secretary  of  the  Navy,  by  David  Henslmw, 
has  been  made  the  occasion,  by  a  few  of  his  personal  and  political  opponents,  to 
revive  and  assail  him  with  these  four  times  refuted  charges  of  fraud,  in  order  to 
prevent  his  confirmation  by  the  Senate  ;  and  a  press,  immediately  under  the  influence 
of  the  principal  accuser,  who  has  so  often  been  foiled  in  his  malevolence  in  this 
matter,  has  been,  in  conjunction  with  the  reckless  Boston  Atlas  as  its  echo,  the  me- 
dium for  voluminous  reiterations  of  these  four  times  discredited  falsehoods.  It  will 
not  do  to  say  that  there  is  anything  new  in  these  charges,  as  applied  to  Mr.  Hen- 
shaw,  instead  of  Mr.  Mills.  They  are  the  same ;  for  not  a  step  in  this  transaction 
could  have  been  taken  by  David  Henshaw,  without  the  connivance  of  the  law  officers, 
and  the  perjury  of  the  appraisers ;  and  thus  the  answer  to  the  charges  against  them, 


29 

covers  every  charge  in  relation  to  the  South  Boston  lands,  which  can  be  applied  to 
Mr.  Henshaw. 

But  if,  after  this  exposition,  the  government  or  Congress,  at  the  call  of  any  one, 
are  willing  to  go  into  a  renewed  investigation,  embracing  a  full  commission  to  take 
testimony  on  every  point,  the  friends  of  David  Henshaw,  and  Mr.  Henshaw  himself, 
are  ready  and  desirous  to  meet  it,  and  every  other  charge  against  him,  as  has  been 
shown  by  his  memorial  to  the  Senate  of  Feb.  14th. 

And  here  they  rest  the  ample  and  incontrovertible  defence  of  Mr.  Henshaw,  which 
will  doubtless  surprise  many  who  have  been  led  to  suppose  that  where  there  has  been 
so  much  assertion  there  must  have  been  some  proof,  and  that  no  men  could  be  found, 
in  civilized  society,  to  make  such  charges  as  have  been  made  against  Mr.  Henshaw, 
with  so  little  shadow  of  evidence  to  support  them. 

In  conclusion,  we  ask  every  citizen  who  knows  how  to  appreciate  the  reputation 
of  other  men  because  he  values  his  own,  to  say,  upon  this  exposition,  what  judgment 
upright  and  high-minded  men  ought  to  pass  upon  the  calumniators  of  David  Hen- 
shaw ?  And  if  any  Senator  of  the  United  States  was  influenced  in  his  vote  against 
the  nomination  of  Mr.  Henshaw  by  such  calumnies,  we  ask  him,  as  an  honorable  and 
honest  man,  to  say  if  he  is  not  now  convinced  that  he  has  been  misled,  by  slander, 
into  an  erroneous  and  unjust  judgment ;  and  for  the  justice  of  this  conclusion  we 
appeal  to  every  man  capable  of  an  honorable  sentiment. 

BOSTON,  Feb.  20,  1844. 


ADDITIONAL. 

While  this  pamphlet  was  going  through  the  press,  a  document  was  received,  which 
is  printed  as 

"  Report  No.  257,  28th  Congress,  1st  Session,  House  of  Representatives,  Feb.  28, 
1844.  Read  and  laid  on  the  table," — headed  "  WILLIAM  WRIGHT." 

This  is  ajiftk  official  investigation  on  account  of  Mr.  William  Wright's  exquisite 
perception  in  the  matter  of  the  South  Boston  lands,  and  has  resulted,  like  all  the  rest, 
in  his  discomfiture  and  failure  to  fasten  fraud  or  a  suspicion  of  misconduct  on  any 
one. 

The  Report  is  made  by  Mr.  Saunders,  of  North  Carolina,  Chairman  of  the  Com- 
mittee on  the  Judiciary  of  the  House,  to  whom  Mr.  Henshaw  addressed  his  letter, 
which  was  recently  published.  Appended  to  that  report  are  several  of  the  documents 
which  are  published  in  the  Appendix  to  this  pamphlet,  but  the  Committee  on  the 
Judiciary  did  not  have  before  them  many  of  the  most  important  documents  and  facts 
which  are  given,  and  established  by  proofs  in  this  "  Refutation."  The  documents 
before  them  were,  Mr.  Mills'  letter  to  the  Solicitor,  of  August  6,  1838,  and  the 
accompanying  papers  there  referred  to ;  the  oath  and  return  of  the  Appraisers  and 
the  Marshal,  (but  not  the  statement  of  the  Appraisers  as  to  their  proceedings ;)  and 
the  opinion  of  Hon.  Rufus  Choate,  of  Nov.  22,  1838. 

All  the  above  documents  are  published  in  the  Appendix  to  this  "  Refutation,"  but 
they  constitute  only  a  small  portion  of  the  evidence  here  collected  to  establish  the 
correctness  of  the  proceedings  ;  nevertheless,  they  were  sufficient  to  satisfy  the  Com- 
mittee on  the  Judiciary,  and  they  asked  to  be  discharged  from  the  further  considera- 
tion of  the  memorial  of  William  Wright. 

This  very  recent  report  of  the  Committee  on  the  Judiciary  was  made  "  upon  the 
memorial  of  William  Wright,"  the  history  of  which  is  thus  given.  It  was  presented 
at  the  first  session  of  the  26th  Congress,  and  referred  to  a  select  committee,  who 
asked  authority  to  proceed  to  Boston,  with  power  to  send  for  persons  and  papers,  and 
"  to  inquire  into  all  matters  relating  to  the  collection  and  settlement  of  the  claims  of 
the  United  States  against  the  late  Commonwealth  Bank."  This  motion  was  laid  on 
the  table.  At  the  second  session  of  the  27th  Congress,  (1842,)  the  memorial  was 


30 

again  referred  to  a  select  committee,  who  asked  for  the  same  power  as  above ;  and  ori 
motion  of  Mr.  Saunders,  power  was  granted  to  the  committee  "  to  send  for  persons 
and  papers,  or  to  take  the  depositions  of  witnesses,  as  to  them  shall  seem  most  expe- 
dient." 

Under  this  ample  authority,  a  subpoena  was  forwarded  to  William  Wright,  the 
memorialist,  and  he  was  directed  to  insert  in  the  subpoena  the  names  of  suck  other 
witnesses  as  he  might  deem  important  !  This  process  put  into  the  hands  of  William 
Wright,  (the  accuser-general  in  this  matter,)  the  unlimited  power  to  summon  before 
the  Judiciary  Committee  at  Washington,  or  to  take  the  depositions  of  those  from 
whom,  under  oath,  he  could  get  a  fact  to  charge  fraud,  connivance  or  misconduct 
upon  Messrs'.  Mills,  Henshaw,  Sibley,  Choate,  Merrill,  Gurney,  Binney,  Pickering,  or 
any  person  directly  or  indirectly  connected  with  his  alleged  "stupendous  cheat"  in. 
the  matter  of  the  South  Boston  lands  and  the  Commonwealth  Bank. 

Instead  of  doing  this,  the  committee  say,  "  Mr.  Wright  neither  attended  in  person, 
nor  caused  any  other  witnesses  to  be  summoned  before  the  committee  /"  and  the  com- 
mittee asked  to  be  discharged  from  the  memorial. 

At  the  present  session,  (1814,)  after  Mr.  Henshaw's  nomination  as  Secretary  of  the 
Navy,  this  same  Mr.  William  Wright  "  again  memorialized  Congress,  insisting  that 
the  government  has  been  defrauded  of  large  sums  of  public  money,  which  by  proper 
steps  may  be  recovered  back;"  which  memorial  was  referred  to  the  Committee  on  the 
Judiciary.  Mr.  Wright  had  been  notified  to  present  testimony  to  substantiate 
his  charges,  but,  as  they  say  in  their  report,  "  he  failed  to  testify  or  to  offer  any  proof, 
but  relied  upon  the  documents  on  file  in  the  department,  full  copies  of  which  were 
forwarded,  and  upon  the  transcripts  of  certain  papers  forwarded  from  the  public 
records  in  Boston." 

All  these  papers  are  embraced  in  the  documents  above  enumerated  as  the  appendix 
to  the  report  of  the  Judiciary  Committee. 

Here  was  an  entire  failure  to  produce  evidence  on  the  part  of  the  accuser. 
Upon  this  evidence,  the  committee  say  that  "  the  report  of  Mr.  Gilpin,  Solicitor 
of  the  Treasury,  denies  many  of  the  material  facts,  as  charged  [by  William  Wright,] 
and  justifies  the  transaction."  They  also  add  that  Mr.  Wright  does  not  profess  to  be 
able  to  disclose  any  more  facts,  and  they  distinctly  negative  his  main  charge,  viz., 
that  the  South  Boston  lands  might  have  been  sold  by  the  Marshal,  instead  of  extend- 
ing the  execution  and  set  off  upon  them,  as  was  done  under  the  agreement,  because, 
as  the  committee  say,  "  the  Bank  had  nothing  whereon  to  levy,  except  the  land  of 
the  Warren  Association,  which  had  been  conveyed  [to  the  Bank]  with  the  express 
understanding  that  it  was  to  be  proceeded  against  by  appraisement,  and  that  in  dis- 
charge of  the  securities  of  the  Association,  which  were  pledged  for  the  indemnity  of 
the  sureties  on  the  deposit  bond  of  the  Bank."  They  further  say,  that  "  the  United 
States  had  no  judgment  against  these  sureties,  and,  as  its  Attorneys  supposed,  in  all 
probability  might  never  obtain  one." 

The  final  result  the  committee  arrive  at,  (even  without  the  aid  of  much  of  the 
most  material  evidence  in  the  case,  which  was  not  laid  before  them,  but  which  is 
found  in  this  "  Refutation,")  is  as  folloAvs  :    "  And  whilst  partiality  and  corruption 
'  may  be  the  general  rule  for  setting  aside  awards  and  proceedings  of  this  kind, /rom 
the  evidence  before  them  the  committee  do  not  feel  at  liberty  to  draw  such  a  conclu- 
sion.    The  late  Solicitor  of  the  Treasury,  (Mr.  Gilpin,)  the  law  officer  of  the  gov- 
'  ernment,  under  whose  supervision  this  whole  matter  had  been  conducted,  and  who 
'  had  every  means  of  correct  information,  has  said,  in  a  letter  to  the  first  select  com- 
'  mittee  raised  on  the  subject,  after  full  inquiry,  he  had  '  no  hesitation  in  expressing 
'  approbation  of  the  course  taken,  as  that  which,  under  the  circumstances,  was  proper 
'  in  a  legal  point  of  view,  and  decidedly  best  for  the  interest  and  ultimate  security 
of  the  United  States.'     This  opinion  is  well  fortified  by  the  report  of  the  District 
4  Attorney,  a  gentleman  of  unimpeached  integrity,  as  well  as  by  that  of  the  Hon. 
'  Rufus  Choate,  who  had  been  engaged  as  associate  counsel,  and  directed  to  take  any 
and  all  such  legal  steps  as  might  be  considered  necessary  to  the  interest  of  the 
4  United  States,  and  whose  attention  had  been  especially  called  to  this  very  matter. 
'  In  his  report  to  the  Solicitor,  Mr.  Choate  uses  this  strong  language,  thus  emphat- 


31 

"  ically  exonerating  Mr.  Mills,  the  United  States  Attorney,  who  had  conducted  the1 
"  whole  business,  from  all  grounds  of  censure  or  suspicion  :  '  The  result  to  which  I 
"  have  arrived  is,  that  the  arrangement  effected  by  Mr.  Mills  was,  Under  the  embar- 
"  rassing  circumstances  of  the  case,  a  judicious  arrangement  for  the  government, 
"  entered  into  in  the  purest  official  good  faith,  in  the  exercise  of  a  sound  discretion.' 

"  Such  being  the  history  of  the  transaction,  the  committee  cannot  perceive  the! 
"  necessity  of  any  action  on  the  part  of  Congress.  If  the  facts,  as  disclosed  by  the 
"  documents,  represent  the  matter  truly,  then  it  becomes  a  judicial  question,  whether 
"  they  disclose  such  a  case  of  collusion  and  fraud  as  to  call  for  the  interposition  of 
11  the  courts  to  set  aside  the  proceedings.  If  the  facts  be  not  fully  disclosed,  still  it 
"  would  be  for  the  court  before  whom  the  judgment  had  been  rendered,  and  to  which 
"  the  writ  of  execution  had  been  returned,  to  investigate  the  matter,  and  to  take  such 
"  proceedings  in  that  behalf  as  the  circumstances  might  demand.  The  Treasury 
"  Department  has  full  power,  it  is  presumed,  to  employ  an  agent  to  inquire  into  the 
"  facts,  if  any  doubt  should  exist  as  to  the  correctness  of  what  is  on  file.  So  as  td 
"  the  proceedings  under  the  writ  of  extent,  by  which  the  United  States  has  acquired 
"  and  holds  title  to  the  property :  if  not  according  to  law,  it  would  be  a  question  for 
"  the  judiciary  to  decide.  The  memorialist  does  not  profess  to  be  able  to  disclose  anij 
"  state  of  facts  itihich  toould  enable  Congress  to  decide  the  points  in  dispute. 

"  In  conclusion,  the  committee  content  themselves  with  a  detail  of  the  facts  as 
".herein  before  given,  and  with  referring  to  the  reports  made  by  the  two  legal  gen* 
"  tlemen  who  have  had  charge  of  the  matter ;  and  if  it  shall  be  the  pleasure  of  the 
"  House  to  take  any  further  order  in  the  premises,  it  will  be  in  its  power  to  do  so, 
"  from  the  facts  as  disclosed.  The  committee,  however,  do  not  propose  anything  to 
"  be  done,  and  respectfully  ask  to  be  discharged  from  the  further  consideration  of  the 
"  memorial.'' 

This  report  fully  sustains  all  the  preceding  reports  upon  this  subject,  and  demon* 
strates,  Over  and  over  again,  the  futile  pertinacity  with  which  these  now  Jive  times 
refuted  charges  have  been  pressed  upon  Congress  and  the  Departments,  by  men 
who,  when  every  power  of  investigation  is  put  into  their  hands,  and  the  whole  aid 
of  Congress  given  them  to  summon  witnesses  and  collect  depositions  and  documents 
from  any  and  every  quarter,  are  compelled  to  back  out  from  even  an  exparte  proof 
all  on  one  side,  and  to  confess,  when  pushed  to  the  point  of  giving  or  producing  tes- 
timony, that  they  "  are  not  able  to  disclose  any  state  of  facts  ivhich  toould  enable  Con* 
gress  to  decide  the  points  in  dispute*" 

Again  we  ask  what  judgment  honest  and  honorable  men  ought  to  form  of  the 
character  and  conduct  of  such  pertinacious  and  jive  times  discredited  calumniators  ? 
They  have  exhausted  Congress  and  the  Departments,  and  met  only  with  distinct 
disproof  and  condemnation  of  all  their  charges.  The  courts  are  open  to  them,  and 
the  parties  accused  are  as  ready  to  meet  the  issue  in  that  tribunal  as  they  always 
have  been  the  scrutiny  of  Congress  or  the  judgments  of  honest  men.  But  in  the 
mean  time,  the  libellers  in  these  maliciously  groundless  allegations  may  thank  the 
forbearance  of  those  they  have  calumniated,  that  they  have  not  been  called  upon  for 
proof  of  their  libels,  in  the  form  of  judicial  process,  and  been  compelled,  as  the  prin- 
cipal accuser  was,  when  summoned  before  the  committee  of  the  House,  to  confess 
that  they  "  do  not  profess  to  be  able  to  disclose  any  state  of  facts,"  to  prove  the  truth 
in  justification. 


APPENDIX 

OF  DOCUMENTARY  EVIDENCE,  ESTABLISHING  THE  FACTS  STATED  IN  THE  TEXT. 


No.  1,  page  5. 

Withdrawal  of  funds  from  the  Commonwealth  Bank. 

Commonwealth  Bank,  Boston,  Feb.  16,  1838. 

DEAR  SIR, — 1  would  state  that  the  specie  deposited  was  what  is  termed  a  special  deposit ;  and  in 
every  instance  where  there  was  a  credit  or  a  debit  to  the  account,  the  following  remark  is  made  : 
"  Special  specie  deposit  by  D.  Henshaw,  Collector."  With  regard  to  the  precise  time  said  deposit 
was  withdrawn  from  the  Bank,  on  that  day,  I  am  not  able  to  inform  you ;  so  far  as  I  can  recollect, 
however,  it  was  between  the  hours  of  twelve  and  one.  It  is  impossible  for  me  to  be  more"  particular 
on  this  point,  owing  to  the  very  numerous  business  transactions  I  was  obliged  to  perform,  on  that 
day,  in  my  duty  as  teller. 

In  answer  to  your  question  touching  the  testimony  given  by  me  to  the  committee  appointed  by 
the  state,  whether  it  was  written  by  me  or  by  the  committee,  I  would  say,  it  was  taken  verbally  from 
me,  and  written  by  them.  I  would  also  state  that  the  minutes  of  my  testimony,  taken  by  said  com. 
mittee,  were  not,  to  my  recollection,  recapitulated. 

Respectfully,  TH.  W.  COLBURN, 

Hon.  DAVID  HENSHAW. 

Boston,  Feb.  16,  1838. 

DEAR  SIR, — Yours  of  the  above  date  is  before  me.  In  answer  to  your  inquiry  respecting  the  time 
I  took  the  specie  from  the  Commonwealth  Bank,  on  January  11,  from  circumstances  distinctly 
within  my  recollection,  it  must  have  been  about  twenty  minutes  past  one  o'clock,  when  I  brought 
ihe  specie  from  the  Bank  to  the  Custom  House. 

Yours,  respectfully,  PETER  DUNBAR. 

Custom  House,  Boston,  Feb.  16,  1838. 

SIR, — In  answer  to  your  note  of  this  day,  I  have  to  state,  that  on  the  llth  of  January,  about 
one  o'clock,  I  called  on  Mr.  P.  Dunbar,  who  was  the  truckman  for  the  Custom  House,  to  go  with 
me  to  the  Commonwealth  Bank,  and  bring  the  specie,  on  special  deposit,  to  this  office.  He  went 
with  me  to  the  Bank,  and  we  there  counted  the  specie,  amounting  to  $10,028  71,  which  was  brought 
to  the  Custom  House  and  deposited  in  the  vault  by  him. 

After  I  had  returned,  you  requested  me  to  withdraw  from  the  Bank,  at  two  o'clock,  the  remaining 
Treasury  notes  there,  which  I  did,  amounting  to  $43,350. 

Very  respectfully,  your  obedient  servant, 

HON.  DAVID  HENSHAW,  Late  Collector,  ADAMS  BAILEY.  Deputy  Collector. 

Custom  House,  Boston,  Feb.  16,  1838. 

In  answer  to  your  note,  requesting  me  to  state  at  what  time,  and  what  amount  of  specie  was 
withdrawn  from  the  Commonwealth  Bank,  on  the  llth  of  January,  and  whether  the  specie  was  a 
special  deposit  or  otherwise,  I  have  to  say,  that  between  one  and  two,  P.  M.,  of  that  day,  the  llth 
of  January,  I  received  from  the  Deputy  Collector,  and  deposited  in  the  vault  of  the  Custom  House, 
the  balance  of  special  deposit  of  specie  from  the  Commonwealth  Bank,  amounting  to  ten  thousand 
and  twenty-eight  dollars  and  seventy -one  cents. 

I  am,  sir,  very  respectfully,  your  obedient  servant,        WM.  A.  WELLMAN, 

Late  temporary  Cashier  of  the  Boston  Custom  Hotesf. 
Ho;<.  DAVID  HENSHAW,  Late  Collector  of  the  Customs,  Boston, 


No.  2,  page  9. 

Mr,  IVellman's  statement  as  to  the  notice  calling  in  the  specie  checks. 

Custom  House,  Boston,  Feb.  3,  1844. 

DEAR  SIR, — Your  note  of  the  2d  instant,  referring  to  my  letter  of  the  16th  of  February,  1838, 
addressed  to  Mr.  Henshaw,  late  Collector  for  this  District,  is  received. 
5 


34 

In  answer  to  your  request,  that  I  would  state  the  reason  for  my  transfer  to  the  Cashierrs  Depart- 
ment, and  why  I  suggested  to  Mr.  Henshaw  the  necessity  for  issuing  a  notice  to  persons  holding 
checks  against  the  Custom  House  to  present  them  for  payment,  I  have  to  reply, — that  on  the  9th 
of  January,  1838,  I  was  informed  that  the  books  and  accounts  of  the  Cashier  were  in  disorder,  and 
that  the  cash  afl'airs  required  investigation  ;  and  I  was  requested  to  assume  the  duties  of  that  De- 
partment. The  amount  of  discrepancy  in  the  Cashier's  accounts  was  not  known,  and  could  not  be 
ascertained  satisfactorily  without  an  adjustment  of  the  specie  checks,  which  had  been  issued  and  were 
outstanding.  Accordingly,  on  the  morning  of  the  next  day,  the  10th,  I  notified  Mr.  Henshaw  that 
the  specie  check  account,  so  called,  could  not  be  adjusted  without  calling  in  and  redeeming  those 
checks  outstanding.  This  was  prior  to  the  failure  of  the  Commonwealth  Bank,  and  before  I  had  the 
slightest  intimation  of  its  embarrassment,  and  was  done  with  reference  only  to  the  settlement  of  the 
accounts  of  the  Cashier  of  the  Custom  House.*  The  notice  referred  to,  was  written  by  Mr.  Henshaw 
on  the  instant  of  the  suggestion,  in  my  presence,  and  sent  to  the  public  papers. 

You  request  me  to  state,  "whether  Mr.  Henshaw  had  been  confined  to  his  bed  for  many  weeks 
by  sickness,  and  about  how  many  days  before  the  date  of  the  advertisement  he  had  been  well 
enough  to  attend  to  his  official  duties  at  the  Custom  House."  In  reply,  I  have  to  say — that  I  am 
HOW  unable  to  state,  precisely,  the  time  he  was  absent  from  the  office  at  that  period ;  but  my  im- 
pression is,  that  he  came  to  the  office  on  the  8th  of  January,  being  the  first  time  for  several  weeks. 

On  the  llth  of  January,  at  the  close  of  business,  I  received  the  balance  of  special  deposit  of 
specie  from  the  Bank ;  and  all  outstanding  checks  were  subsequently  paid  by  me,  under  the  direction  of, 
Mr.  Henshaw.  By  reference  to  the  records,  it  appears  that  the  last  check  was  presented  and  paid, 
by  Mr.  Henshaw,  on  the  23d  of  March,  about  two  months  after  Mr.  Henshaw  resigned  the  office 
of  Collector.  Very  respectfully,  I  am,  sir,  your  obedient  servant 

WILLIAM  WAJID.  Esq.,  Boston.  WM.  A.  WELLMAN. 

No.  3,  page  13. 

31r.  Taney's  instructions  as  to  deposits. 

Treasury  Department,  Sept.  26,  1833. 

SIR, — Believing  that  the  public  interest  requires  that  the  Bank  of  the  United  States  should  cease 
to  be  the  depository  of  the  money  of  the  United  States,  I  have  determined  to  use  the  State  Banks  as- 
places  of  deposit,  and  have  selected  for  that  purpose,  in  the  city  of  Boston,  The  Commonwealth 
Bank,  and  The  Merchants'  Bank. 

You  will,  therefore,  present  the  enclosed  draughts  of  contracts  to  the  respective  Batiks  for  which 
they  are  intended,  and  upon  the  execution  of  the  contracts,  you  will  forward  them  to  this  Depart- 
ment. You  will  ask  the  aid  of  the  District  Attorney  of  the  United  States,  who  will  see  that  the 
several  contracts  are  executed  in  dne  form. 

The  contracts  being  executed,  you  will  then  deposit  all  of  the  public  money  which  may  come  to 
your  hands,  after  the  thirtieth  of  this  present  mouth  of  September,  in  the  banks  above  mentioned, 
until  the  further  order  of  this  Department.  You  will  also  deposit  in  the  said  banks  for  collection, 
all  of  the  Bonds  which  may  hereafter  be  taken  for  the  payment  of  duties. 

You  will  also  call  on  the  Branch  Bank  of  the  United  State?,  in  the  city  of  Boston,  and  receive 
from  it  all  the  Bonds  heretofore  given  to  the  United  States,  which  are  payable  on  or  after  the  first 
day  of  October  next,  and  deposit  them,  for  collection,  in  the  aforesaid  State  Banks.  I  send  yoi> 
herewith  an  order  on  the  Branch  Bank,  for  that  purpose. 

The  money  received  by  you,  and  the  bonds,  are  to  be  apportioned  among  the  said  State  Banks, 
so  as  to  divide  the  public  deposits  as  near  as  may  be  among  them,  according  to  the  amount  of 
capital  actually  paid  in. 

When  the  contracts  shall  have  been  executed  by  the  banks,  you  will  forward  the  enclosed  letters- 
to  the  Collectors  of  Plymouth,  Barnstable,  New  Bedford,  Belfast,  and  Kennebunk,  who  have  here- 
tofore deposited  the  money  received  by  them  in  the  Branch  Bank,  at  Boston,  The  collections  out 
of  Boston,  not  being  very  large  in  amount,  they  are,  to  save  trouble  and  perplexity,  all  directed,  as- 
you  will  see,  to  be  paid  into  the  Commonwealth  Bank. 

You  will  continue  to  deposit  as  usual  in  the  Branch  Bank  of  the  United  States,  ttutil  the  thirtieth 
of  the  present  month  of  September,  inclti 

You  will  keep  a  copy  of  the  contracts  executed  by  the  banks,  and  from  time  to  time  advise  this 
Department  of  anything  you  may  deem  material  to  the  public  interest,  connected  with  the  change 
of  the  deposits.  (Signed)  R.  B.  TANEY,  Secretary  of  the  Trtatury* 

To  DAVID  HEN-SHAW,  Esq..  Collector,  Boston. 


fto.  4,  page  13* 

Sir.  Hcnsharts  letter  to  Mr.  Tdne.y. 

Boston  Custom  House,  Sept.  3Qth,  1833. 

R.  B.  TAXITY,  Esq.,  Secretary  of  Treasury.     SIR, — In  obedience  to  your  instructions  of  the  26tnv 
the  contract  with  the  Commonwealth  Bank" and  the  Merchants'  Bank  of  this  city  to  receive  on  de- 

*  This  fact  was  not  mentioned  in  my  former  note  from  motives  of  kindness  on  the  part  of  Mr.  Henshaw, 


35 

I 

posit  the  money  of  the  United  States,  have  been  executed.  And  I  have  the  honor  to  enclose  one 
with  each  of  these  banks,  retaining  the  duplicates.  These  banks  will  give  the  collateral  security 
stipulated  in  the  contracts,  to  be  furnished  whenever  required.  But  from  their  good  standing 
and  known  solvency,  it  will  probably  never  be  necessary  to  require  it.  I  withdrew  the  Bonds  payable 
in  October,  from  the  Branch  of the  U.  States  Bank,  where  they  had  been  lodged  for  collection,  and 
deposited  them  in  the  Commonwealth  Bank  this  day.  I  deviated  so  far  from  your  instructions  as 
to  place  them  all  in  that  bank.  I  had  not  time  to  divide  and  make  out  the  necessary  schedule  of 
them.  I  shall  pay  into  the  Merchants'  Bank,  at  the  end  of  each  week,  to  the  credit  of  the  Treasury, 
half  the  balance  in  the  Commonwealth  Bank.  This  plan  will  simplify  the  business  both  for  the 
Collector  and  the  banks.  The  Collector  will  keep,  in  that  case,  an  account  with  but  one  bank, 
saving  half  the  labor,  and  the  Merchants'  Bank  will  have  an  account  with  the  Treasury  only. 

This  arrangement  is  mutually  satisfactory  to  the  banks,  and  if  there  be  in  it  any  inequality  of 
burdens  or  benefits,  they  will  equalize  it  between  themselves.  I  shall  therefore,  with  your  appro- 
bation, continue  it  as  I  have  begun.  Respectfully  yours,  DAVID  HENSHAW,  Cutluior. 

Custom  House,  Boston,  Feb.  23,  1835. 

I  do  hereby  certify  that  the  foregoing  is  an  extract  from  the  copy  of  the  original  letter,  as  it 
appears  on  the  records  of  this  office.  GEORGE  BANCROFT,  Collector. 


No.  5,  page  13. 

Mr.  Taney's  Approval. 

Treasury  Department,  October  5th,  1833. 

SIR, — Your  communication  of  the  30th  ult.  has  been  received,  as  also  the  contracts  of  the 
Commonwealth  Bank  and  the  Merchants'  Bank  inclosed  therein. 

Your  proceedings  relative  to  the  deposits  of  the  public  money  in  those  banks,  as  detailed  in  yout 
communication  above  referred  to,  are  approved  by  the  Department. 

I  am  respectfully,  y<5uf  obedient  servant, 
{Signed)          R.  B.  TANEY,  Secretary  of  the  Treasury-. 
DAVID  HENSHAW,  Esq.,  Collector  of  the  Customs,  Boston. 

Custom  House,  Boston,  February  23,  1838. 

I  do  hereby  certify  that  the  foregoing  is  an  exact  copy  of  the  original  letter,  as  it  appears  on  the 
irecords  of  this  office,  GEORGE   BANCROFT,  Collector, 


No.  6,  page  14. 

Mr.  Hensharc  to  Mr.  Woodbury,  on  balance  in  the  Bank. 

^Custom  House,  Boston,  May  23,  1837. 

SIR, — I  send  you  the  weekly  return,  ending  May  20th,  showing  a  balance  due  to  the  U.  States, 
of  $64,321  49.  This  balance  consists  of  $55,407  62,  deposited  in  the  Commonwealth  Bank ;  $2,521, 
in  specie  on  hand — $1,465  50  deposit,  in  bills,  in  settlement  of  impost  on  woollens,  and  $408,  in  bills  ; 
all  taken  before  the  receipt  of  your  instructions  of  the  12th.  Also  $2,817,  in  sums  paid  to  Inspectors. 
•&c.,  net  yet  charged.  I  have  likewise  in  the  Commonwealth  Bank,  $1'6,500  deposit  in  bills,  amount 
•of  ditties  on  wool  and  woollens,  impost  and  tonnage,  the  accounts  of  which  are  not  yet  made  up, 
so  as  to  enable  me  to  bring  them  into  the  statement,  and  the  difference  between  these  sums  and 
the  apparent  balance  of  $64,321  49,  is  in  the  fee  account,  which  will  appear  on  the  settlement  of  my 
quarterly  account.  I  omitted  to  pay  anything  to  the  credit  of  the  Treasury,  the  last  week,  owing 
to  the  new  state  of  things. 

I  shall  probably  collect  little  money  on  bonds,  and  I  shall  have  considerable  to  pay,  during  the 
•gammer,  to  Light-House  keepers,  Light-House  repairs,  Revenue  Cutter,  Hospital,  &c.  I  have, 
therefore,  retained  this  sum  to  my  credit  in  Bank,  and  await  your  instructions,  either  to  have  it  so 
remain  for  these  purposes,  or  to  pay  it,  or  any  part  of  it,  over  to  the  credit  of  the  Treasury,  as 
heretofore,  as  you  may  direct.  Respectfully,  yours,  DAVID  HENSHAW,  Collector. 

HON.  LEVI  WOODBURY. 


No.  7,  page  15. 

Mr.  Woedbvry,  concerning  funds  for  Fishing  Bounties. 

Treasury  Department,  November  1st,  1837. 

SIR  : — I  have  to  call  your  attention  to  instructions  heretofore  given,  respecting  the  payment  of 
allowances  to  fishing  vessels,  and  request  that  you  will  inform  to  them  in  all  respects,  in  regard  to 
those  becoming  payable  on  the  31st  of  next  month. 


In  addition  to  others  heretofore  authorized  to  draw  upon  you  for  those  objects,  the  Collectors  of 
the  Districts  in  Rhode  Island  and  Connecticut  have  received  such  authority.  You  will  be  pleased, 
therefore,  to  honor  their  drafts,  provided  they  shah  have  first  complied  with  the  usual  formalities 
respecting  the  returns  required  to  be  furnished  you. 

In  the  event  of  the  funds  in  your  hands  from  accruing  duties  not  proving  adequate  to  meet  these 
objects,  and  the  Department  being  so  advised,  and  also  furnished  with  the  amount  probably 
required,  money  will  be  supplied  you,  either  by  drafts  upon  some  of  the  banks  in  your  vicinity,  or 
by  the  issue  of  Treasury  notes,  whichsoever  may  be  deemed  most  advisable  at  the  time. 

I  am,  very  respectfully,  your  ob't  serv't, 

LE  VI  WOODBURY,  Secretary  of  the  Treasury. 

DAVID  HENSHAW,  Esq.,  Collector  of  the  Customs,  Boston. 


No.  8,  page  15. 

Mr.  Woodbury  to  Mr.  Henshaiv. 

Treasury  Department,  November  29th,  1837. 

SIR, — I  am  in  the  receipt  of  your  letter  of  the  25th  inst.,  furnishing  an  estimate  of  the  amount 
of  money  necessary  to  pay  the  drafts  for  fishing  bounties,  authorized  to  be  drawn  upon  you  by  cer- 
tain Collectors. 

The  Department  will  send  you,  as  soon  as  they  can  be  prepared,  Treasury  notes  and  drafts  to  the 
amount  of  fifty  thousand  dollars,  and  the  balance,  say  one  hundred  and  seventy  five  thousand  dol- 
lars, before  the  first  of  January  next,  on  which  day  payments  for  these  objects  fall  due. 

In  regard  to  the  odd  sums  to  which  you  allude,  they  can  be  paid  from  the  funds  now  in  your 
hands,  or  the  drafts  which  you  will  be  pleased  to  retain  for  that  object.  The  Treasury  notes  can  be 
paid  out  for  the  current  expenses  of  your  District,  and  for  such  fishing  bounty  drafts  as  they  can 
be  applied  to.  I  am,  very  respectfully,  your  obedient  servant, 

LEVI   WOODBURY,  Secretary  of  the  Treasury. 
DAVID  HENSHAW,  Esq.,  Collector  of  the  Customs,  Boston. 


No.  9,  page  18. 

Mr.  Henshan's  letter  to  the  Comptroller. 

Boston,  December  20th,  1839. 

SIR, — The  last  adjustment  of  my  accounts,  as  late  Collector  of  the  District  of  Boston  and 
Charlestown,  received  from  your  office,  dated  February  25,  1839,  and  claiming  a  balance  due  from 
me  of  $80,272  30,  has  remained  thus  long  unanswered,  in  the  hope  and  expectation  that  you  would 
credit  me  with  the  sums  I  have  heretofore  and  now  claim  to  have  credited. 

The  first  item  is  the  sum  of $65,941  77 

deposited  in  the  Commonwealth  Bank. 

The.  second  is  a  balance  due  on  my  emolument  account  for  1829,  of 1,15385 

The  third  is  the  amounts  I  paid  to  the  Weighers  and  Gaugers  in  1836  and  1837,      .     .   9,120  44 

I  do  not  include  in  these  your  disallowance  of  my  commission,  $530  64,  charged  in  my  account 
of  Dec.  31st,  1837. 

In  relation  to  the  first  item,  $65,941  77,  which  has  been  the  subject  of  former  frequent  commu- 
nications with  the  Treasury'  Department,  I  have  to  remark,  that  I  am  entitled  to  a  credit  upon  the 
principles  admitted  in  the  First  Auditor's  letter  to  the  Secretary  of  the  Treasury,  of  November  15, 
1839.  The  Auditor,  however,  misapprehends  the  fact  in  supposing  that  I  made  frequent  deposits 
of  bank  paper  or  bank  credits,  in  the  Commonwealth  Bank,  after  I  was  notified  that  it  ceased  to  be 
a  deposit  bank.  The  only  sums  thus  deposited  to  my  credit,  were  $30,500,  placed  there  to  my 
credit  by  the  Department  on  its  own  motion,  and  $42,000  a  check  on  the  Bank  itself,  to  aid  in  pay- 
ing fishing  bounties,  and  which  was  appropriated  for  that  purpose.  But  I  deem  it  quite  unne- 
cessary to  enter  into  these  details  ;  for  whether  or  not  I  could  originally  have  been  held  liable  for 
the  solvency  of  an  institution  selected  by  the  government  as  its  depository,  and  with  which  I  was 
ordered  by  the  competent  authority  to  make  my  deposits  of  the  public  money.  I  clearly  cannot  as 
the  case  now  stands.  The  United  States  sued  for  this  money  as  belonging  to  them,  and  as  due  to 
them  from  the  Commonwealth  Bank.  They  have  recovered  judgment  against  the  Bank,  and  I 
believe  have  got  their  pay  or  ample  security. 

The  First  Auditor,  in  the  letter  referred  to,  says  :  "  I  now  understand  that  a  judgment  has  been 
taken  in  favor  of  the  United  States  against  the  Bank,  including  the  above  sums  ;  and  Mr.  Henshaw 
now  insists  that  inasmuch  as  the  United  States  have  taken  the  Bank  for  the  deposit  in  question,  that  he 
ought  of  course  to  be  released,  and  a  credit  given  to  him  for  the  same  amount.  I  had  no  notice  of 
this  judgment  until  recently,  nor  am  I  now  officially  informed  under  what  circumstances  it  was 
taken.  I  presume,  however,  that  if  it  has  been  taken  under  the  direction  of  the  Department,  unless 
taken  as  collateral  security,  with  the  consent  of  Mr.  Henshaw,  it  will  release  him ;  and  that,  as  a 
matter  of  course,  he  ought  to  be  credited  with  the  amount  on  his  account." 

The  First  Auditor,  on  the  9th  of  February,  1839,  admits  that  the  judgment  was  taken  under  the 


37 

advisement  and  direction  of  the  Secretary  and  Solicitor  of  the  Treasury,  and  it  certainly  Was  not 
taken  with  my  assent ;  nor  could  it  be  taken  as  collateral  security  in  this  way.  The  taking  the 
judgment  against  the  Bank  for  this  debt,  extinguished  all  legal  and  equitable  claim  upon  me,  if  any 
had  before  existed  ;  but  I  maintain  that  the  United  States  never  had  any  claim  on  me  for  the  sol- 
vency of  this  Bank,  or  the  payment  by  me  of  this  money  held  by  the  Bank,  either  in  law  or 
equity  ;  and  the  withholding  this  credit  from  me,  under  these  circumstances,  when  the  United  States 
have  not  only  taken  a  judgment  against  the  Bank,  but  have  actually  received  on  attachment  and 
execution  the  sum  of  about  $298,000,  and  for  the  balance  of  about  $56,000,  retain  ample  security, 
I  cannot  but  consider  an  act  of  great  injustice  and  palpable  oppression. 

On  the  second  item  of  credit  I  claim  $1,153  85.  I  have  to  remark  that  it  is  simply  a  question 
whether  the  law,  which  limits  the  amount  of  fees  a  Collector  can  retain,  fixes  or  not  a  pro  rata 
compensation.  Having  before  given  my  views  to  the  Department  on  this  point,  it  is  needless  to 
repeat  them  now.  But  I  beg  leave  to  remind  you  that  the  District  and  Circuit  Courts  of  the  United 
States,  for  this  Judicial  Circuit,  have  decided  the  principle  on  which  this  allowance  is  claimed  to  be 
correct,  in  the  cases  of  the  United  States  vs.  William  Pearce,  late  Collector  at  Gloucester ;  and 
quite  recently,  in  the  case  of  the  United  States  against  R.  D.  Harris,  late  Navy  Agent  in  this  place. 

The  Circuit  Court  of  Illinois  has  also  enforced  the  same  principle  in  the  case  of  B.  F.  Edwards, 
receiver  of  public  moneys  at  Edwardville,  111. ;  and  I  am  informed  that  the  Judges  of  the  Supreme 
Court,  at  their  last  meeting  in  Washington,  on  an  informal  consultation  among  themselves,  con- 
firmed this  principle.  If  any  additional  sanctions  are  required,  permit  me  to  refer  to  your  own 
Department.  If  I  am  rightly  informed,  Mr.  Thompson  was  allowed  by  Comptroller  Anderson,  as 
Collector  of  New  York,  for  the  first  four  months  of  1829,  $3,995  76,  and  Mr.  Swartwout,  who  suc- 
ceeded him,  was  allowed  $4000  for  the  residue  of  that  year.  With  these  facts  in  existence,  it  seems 
harsh  to  refuse  me  the  credit  I  claim,  and  hard  to  drive  me  to  the  expense  of  a  judicial  decision  to 
obtain  justice. 

The  next  item  of  your  disallowance  is  $9,120  44,  comprising  in  your  adjustment  various  sums  I 
paid  to  the  Weighers  and  Gaugers  in  1836  and  1837. 

The  principal  part  of  this  sum,  viz.,  $6,882  20,  you  aver  to  be  surplus  fees  overpaid  the  Weighers 
and  Gaugers  of  this  port  for  the  year  1836. 

The  manner  in  which  you  arrive  at  this  result  is  this  :  you  take  the  whole  amount  of  fees  earned 

by  these  officers  in  the  year  1836,  say , $25,833  50 

You  deduct  expenses, 8,451  30 


Net  earnings,  17,382  20 

You  then  deduct  for  7  Weighers  and  Gaugers,  $1500  each, 10,500  00 


Leaving  $6,882  20 

which  you  decline  to  allow.  Your  first  error  is  in  assuming,  contrary  to  the  facts,  that  there  were  but 
seven  Weighers  and  Gaugers  at  this  port  in  that  year.  The  permanent  Weighers  and  Gaugers  for 
1836.  were  Joseph  Loring,  Thomas  M.Vinson,  J.  L.  C.  Amee,  N.  Tracy,  J.  M.  Fiske,  A.  H.  Wai'd, 
Theodore  Dexter,  James  Estabrook,  Samuel  Walker,  L.  Hamilton,  Ezra  Mudge,  John  Champney 
and  S.  Cole.  Col.  Vinson  resigned  in  the  early  part  of  the  year,  and  Gen.  J.  L.  C.  Amee  succeeded 
him.  The  appropriation  law  of  1835,  fixing  a  maximum  for  these  Weighers  and  Gaugers,  expired 
on  the  31st  of  Dec.,  of  that  year.  The  new  act,  limiting  their  compensation,  did  not  pass  until 
July  4,  1836.  The  Weighers  and  Gaugers  in  the  mean  time  were  entitled  to  all  the  fees  prescribed 
by  the  acts  of  Congress  in  1799  and  1816,  as  fast  as  they  earned  them.  They  had  earned  and 
received,  exclusive  of  their  expenses,  prior  to  the  passage  of  the  law,  $12,819  70,  divided  as  follows  : 
to  Vinson  and  Amee  $1,831  38J,  and  to  Tracy,  Fiske,  Loring,  Dexter,  Estabrook  and  Ward,  each 
the  same  sum.  On  learning  the  passage  of  the  appropriation  act  of  July  4,  1836,  these  officers 
resigned,  except  Gen.  Amee  and  A.  H.  Ward.  I  considered  the  law  prospective  in  its  operation, 
and  that  Congress  so  intended  it — that  they  could  no  more  legislate  these  fees  out  of  the  hands  of 
the  Weighers  and  Gaugers  who  had  earned  and  received  them,  under  existing  laws,  by  a  retroac- 
tive law,  than  they  could  legislate  your  salary  for  years  past,  out  of  your  pocket.  On  the  resigna- 
tion of  these  officers,  Samuel  Walker,  L.  Hamilton,  Ezra  Mudge,  J.  Champney  and  S.  Cole  were 
appointed.  Some  of  these  acted  and  were  paid  as  temporary  officers,  before  their  appointment  as 
permanent  officers.  I  suppose  there  Can  be  no  doubt  that  these  officers  were  entitled  to  their  fees 
as  fast  as  they  earned  them4,  not  to  exceed  the  pro  rata  compensation — they  contend  that  they  arc 
entitled  to  them  until  they  reach  the  maximum.  I  do  not  consider  it  necessary  here  to  repeat  what 
I  have  so  often  written  before,  on  the  details  of  these  accounts.  We  differ  radically  in  the  principle 
of  making  them  up.  You  contend  that  there  were  but  seven  offices  of  Weighers  and  Gaugers  at 
this  port  in  1836,  and  that  there  were  o"nly  $1500  appropriated  to  each  office  ;  that  the  appro- 
priation law  of  July  4,  1836,  had  a  retrospective  operation  back  to  Jan.  1, 1836  ;  that  I  am  bound  to 
refund  what  I  paid  the  seven  Weighers  and  Gaugers  over  the  pro  rata  or  rather  maximum  of  $1500. 

I  maintain  that  theTe  were  thirteen  officers  employed  as  permanent  Weighers  and  Gaugers 
during  that  year ;  that  those  employed  before  the  passage  of  the  act  of  July  4,  1836,  were  legally 
entitled  to  receive  and  retain  all  they  earned  prior  to  that  period;  that  those em  ployed  subsequently 
were  entitled  to  their  fees  until  they  reached  the  maximum  of  $1500  ;  and  further,  that  if  there  be 
a  refund  claimed,  the  Department  must  look  to  the  officers  who  received  and  who  owe  the  money, 
and  not  to  me  for  it.  I  am  informed  that  the  Department  sanctioned  this  last  principle  iu  the  set. 
tlement  of  Mr.  Breedlove's  accounts  as  Collector  of  New  Orleans. 

In  conclusion,  permit  me  earnestly  to  solicit  your  attention  to  my  claims.     I  am  very  desirous  to 


39 

have  my  accounts  closed.     The  delay  in  settling  them  is  a  serious  inconvenience  to  me,  and  I 
think  an  act  of  unnecessary  and  unmerited  hardship. 

Respectfully  yours.         DAVID  HENSHAW,  Late  Collector. 
J.  N.  BARKER,  Comptroller. 


No.  10,  page  18. 

Record  of  Judgment  of  the  Court.  U.  S.  vs.  David  Henshatv. 
UNITED  STATES  OF  AMERICA.— MASSACHUSETTS  DISTRICT,  ss. 

At  the  District  Court  of  the  United  States,  begun  and  holden  at  Boston,  within  and  for  the  Dis- 
trict of  Massachusetts,  on  the  first  Tuesday  (being  the  first  day)  of  December,  in  the  year  of  our 
Lord  one  thousand  eight  hundred  and  forty.  Before  the  Honorable  JOHN  DAVIS,  lud^v. 

The  United  States  of  America  Fill's.,  vs.  David  Henshaw,  of  Boston,  in  the  District  of  Massa- 
chusetts, Esq.,  Defendant.  In  a  Plea  of  the  case,  for  that  the  said  Henshaw,  at  said  Boston,  to  wit, 
on  the  day  of  the  purchase  of  this  writ,  being  indebted  to  the  said  United  States  in  the  sum  of 
seventy-five  thousand  dollars,  for  so  much  money  there  before  that  time  by  the  said  Henshaw, 
of  the  said  United  States,  and  to  their  use  had  and  received,  in  consideration  thereof  promised 
said  United  States  to  pay  them  the  same  sum  on  demand.  Yet  the  said  Henshaw, 

although  often  required,  has  not  paid  to  the  said  United  States  the  said  sum,  but  hitherto  altogether 
has,  and  still  does  refuse  to  pay  the  same,  to  the  damage  of  the  said  United  States,  as  they  say,  the 
sum  of  seventy -five  thousand  dollars. 

This  action  was  entered  at  the  present  term  of  this  Court,  and  the  parties  appear  by  their  re- 
spective attornies,  and  the  Marshal  returns  that  he  attached  a  chip,  the  property  of  the  said  Defendant, 
and  summoned  him  to  appear  and  answer  at  Court,  by  giving  him  in  hand  a  summons :  And  now, 
by  consent  of  parties,  the  said  Defendant,  although  solemnly  called  to  come  into  Court,  does  not 
appear,  but  makes  default.  It  is  therefore  considered  by  the" Court,  that  the  said  United  States  of 
America  recover  against  the  said  David  Henshaw,  the  sum  of  eight  hundred  and  thirty-six  dollars 
and  twenty-five  cents,  damage,  and  costs  of  suit,  taxed  at  eighteen  dollars  and  eighty-two  cents. 

A  true  copy. 

Attest,  FRANCIS  BASSETT,   Clerk. 


Jfo.  1 1 ,  page  23. 

Statement  of  S.  S.  Len-is  and  Robert  G.  Shari). 

Boston,  December  27,  1843. 
HON.  DAVID  HENSHAW,  Secretary  of  the  Navy,  Washington. 

DEAR  SIR  : — Noticing  in  the  Bay  State  Democrat  of  the  23d  instant,  a  gross,  and  as  I  know 
wholly  unfounded  attack  upon  your  character  and  integrity  as  a  man  and  public  officer,  by  charging 
yott  direct  with  perpetrating  a  fraud  against  the  Government  in  the  land  settlement  with  the  Com- 
monwealth Bank, — and  having  held  with  yourself,  jointly,  a  large  amount  of  securities  placed  in 
our  hands  by  the  Bank  to  indemnify  the  Directors  and  others  against  the  Government,  I  was 
knowing  to  all  the  negotiations  and  settlements  made  between  the  Bank  and  the  Government ; — a 
part  of  which,  I  effected  myself. 

In  justice  to  you,  I  feel  it  to  be  a  simple  act  of  duty  to  state  the  facts  as  they  existed  in  those 
settlements. 

In  the  first  place,  allow  me  to  say  that  the  Government,  instead  of  being  injured  by  you,  (as 
charged  upon  you,)  are  mainly,  if  not  entirely,  indebted  to  you,  and  to  me,  for  all  but  about  $37,000, 
of  the  debt  recovered  of  the  Bank,  amounting  to  $345,517  55 ;  for  it  was  by  our  joint  and  perse- 
vering exertions  that  the  Bank,  after  several  days'  hesitation,  placed  in  our  hands,  as  joint  Trustees, 
promissary  papers  and  securities  to  the  amount  of  their  indebtedness  to  the  Government. 

Two  settlements  were  made  between  the  Bank  and  the  Government ;  the  first  by  a  levy  on  lands 
belonging  to  a  land  company  called  the  "  Warren  Association/'  composed  of  a  number  of  highly 
respectable  persons  of  both  political  parties,  in  which  you  were  a  stockholder  to  a  comparatively 
trifling  amount.  The  Treasurer  of  this  company  was  Hon.  John  Pickering,  solicitor  of  the  city  of 
Boston,  and  one  of  our  most  eminent  lawyers.  The  notes  of  this  company,  to  the  amount  of 
S  160,000,  were  among  the  securities  turned  over  by  the  Bank  to  us,  as  before  mentioned,  and  were  by 
us  given  up  to  the  United  States  Marshal.  Subsequently,  after  a  long  negotiation  between  the  coun- 
sel for  the  Bank  and  the  U.  S.  District  Attorney,  an  agreement  was  made  between  them,  that  the 
Government  should  receive  in  payment  for  these  notes  the  lands  of  the  company,  by  levy  and  ap- 
praisement. The  whole  transaction,  negotiation,  levy  and  appraisement  were  conducted  by  highly 
nonoraole  men,  all  of  whom  were  entirely  disinterested  in  the  result  of  the  transaction,  and  they 
were  all,  excepting  the  District  Attorney  and  the  Marshal,  influential  members  of  the  Whig  party. 

John  R.  Adan,  Esq.,  counsel  for  the  Bank,  managed  the  negotiation  on  its  behalf,  with  the  Dis- 
trict Attorney. 


39 

» 

The  appraisers  consisted  of  Hon.  Judge  Merrill,  Hon.  Nathan  Gurney,  then  Senator  of  Massa 
chusetts,  and  Alderman  of  the  city  of  Boston,  and  Amos  Binney,  Esq.,  Representative  from  Boston 
to  the  State  Legislature  ;  all  men  of  high  standing  morally  and  politically,  and  enjoying,  in  a  large 
degree,  the  confidence  of  this  community.  Is  it  to  be  supposed  that  such  men  would  allow  you,  or 
any  one,  to  influence  them  in  fixing,  under  oath,  (as  they  were  bound  to  do)  the  true  value,  to  the 
best  of  their  judgment,  upon  these  lands  ?  The  idea  is  too  absurd ;  and  yet,  this  supposition,  as 
unlikely  as  it  appears,  is  the  only  one  by  which  I  can  conceive  you  to  be  benefited  in  the  settlement, 
and  then  only  to  the  amount  of  your  trifling  interest  in  the  shares  of  the  Company,  by  influencing 
the  lands  to  be  appraised  above  their  real  value  ;  your  gain  would  then  be  the  excess  of  such  extra 
valuation  on  your  shares.  The  thing  carries  with  it  its  own  refutation  of  the  base  slander. 

As  I  have  said  before,  the  counsel  of  the  Bank  made  the  arrangement  with  the  District  Attorney : 
and  you  are  no  more  responsible  for  that  settlement,  than  you  are  for  the  second  and  last  settle- 
ment, which  I  made  myself,  with  the  Solicitor  of  the  Treasury  at  Washington,  and  the  Hon.  John 
Mills,  of  which  I  take  the  whole  responsibility. 

But  you  have  only,  in  order  to  set  things  right,  to  refer  to  the  files  of  the  Secretary,  or  the 
Solicitor  of  the  Treasury,  for  the  written  opinion  of  the  Hon.  Eufus  Choate  upon  the  subject  of  the 
South  Boston  land  settlement.  He  was  employed  by  the  Government  to  examine  and  report 
upon  it,  and  I  have  always  understood  that  he  did  so.  Robert  G.  Shaw,  Esq.,  one  of  the  Commis- 
sioners associated  with  me  in  building  the  new  Custom  House  in  Boston,  was  a  close  observer  and 
took  a  deep  interest  in  the  matter  of  the  settlement  between  the  Bank  and  the  Government,  and  he 
is,  I  believe,  acquainted  with  all  the  principal  facts  in  the  cases  of  both  settlements. 
With  great  respect,  your  obedient  servant, 

(Signed)        SAMUEL  S.  LEWIS. 

Boston,  Dec.  28,  1843. 

DEAR  SIR, — Our  mutual  friend,  S.  S.  Lewis,  Esq.,  has  sent  me  the  annexed  letter  to  your  address, 
in  which  he  has  referred  to  me  as  being  acquainted  with  the  facts  therein  stated.  I  am  acquainted 
with  what  relates  to  the  land  levy,  as  also  with  many  of  the  other  statements,  and  believe  the  whole 
to  be  true. 

You  will  allow  me  to  add,  that  I  have  known  you  intimately,  since  you  commenced  business,  as 
an  honorable  and  upright  merchant,  and  as  an  intelligent,  faithful  and  industrious  public  officer, 
and  that  your  integrity  has  never  been  suspected  by  any  one  who  knew  you. 

Your  friend  and  obedient  servant, 

(Signed)  ROBERT  G.  SHAW. 

HON.  DAVID  HENSHAW,  Secretary  of  the  Navy,  Washington,  D.  C. 


No.  12,  page  23. 

Ansn-er  of  Mr.  Lewis  as  Trustee. 

C.  C.  Pleas,  January  Term,  1842. 
SAMUEL  BROADWELL  vs.  COMMONWEALTH  BANK  AND  S.  S.  LEWIS,  Trustee. 

And  now  Samuel  S.  Lewis,  in  answer  to  the  interrogatories  to  him  proposed,  declares  and  says, 
that  at  the  lime  of  the  service  of  the  Plaintiff's  writ,  he  had  not  any  goods,  effects  or  credits  of  the 
Defendant,  in  his  hands,  or  possession,  unless  the  Court  shall  otherwise  determine  from  the  fol- 
lowing facts. 

On  the  1st  of  February,  1838,  the  said  Defendant,  by  vote  of  the  Directors,  duly  passed,  trans- 
ferred and  delivered  to  the  Respondent  and  Jno.  Henshaw,  Wm.  Freeman,  Charles  Hood,  Hall  J. 
How,  Oliver  Fletcher,  F.  S.  Carruth,  Otis  Rich,  Adam  Bailey,  Elisha  Parks,  John  K.  Simpson,  and 
David  Hcushaw,  certain  promissory  notes,  and  choses  in  action  to  secure  and  indemnify  the  said 
parties  against  their  liabilities  for  the  Defendant,  to  the  United  States.  This  was  subsequently 
confirmed  by  the  vote  of  the  Directors,  subsequently  passed,  and  a  copy  of  which  is  hereto  annexed. 

This  respondent  further  says,  that  he,  together  with  David  Henshaw,  was  appointed  by  said  Jno. 
Henshaw  and  other  trustees,  to  hold  and  manage  the  said  property,  and  subsequently  David  Hen- 
shaw relinquished  said  trust,  and  the  respondent  was  appointed  sole  trustee. 

The  amount  due  the  United  States  from  said  Bank  at  the  time  of  its  failure,  was  $345,517  55 ; 
the  amount  (nominal)  of  the  securities  so  transferred,  was  $364,011  37.  Many  changes,  renewals, 
and  compromises  had  taken  place  in  regard  to  said  paper,  with  the  assent  of  the  said  Defendant, 
and  said  Tno.  Henshaw  and  others,  and  the  debt  due  the  United  States  has  been  reduced  to  the  sum 
.'>  U>  1.1  with  interest,*  and  the  amount  paid  has  been  paid  from  the  aforesaid  securities. 
At  the  time  of  tho  service  of  the  Plaintiff's  writ,  this  was  the  condition  of  the  said  debt,  and  no 
change  has  since  taken  place  to  the  knowledge  of  the  respondent. 

At  the  time  of  the  service  of  the  said  writ,  this  respondent  had  nothing  beside  the  said  securities 
in  his  hands,  except  a  small  sum  of  money  not  sufficient  to  defray  the  expenses  to  which  this  re- 
spondent had  been  subjected,  and  the  charges  of  executing  the  said  trust,  and  excepting  also  bills 

*  This  balance  was  subsequently  paid,  and  the  U.  States  received  its  whole  debt,  :\11  of  which  was 
without  depreciation,  except  the  levy  on  the  South  Boston  lands. 


40 

of  the  said  Bank,  to  the  amount  of  $4,427,  which  this  respondent,  with  the  assent  of  parties  interested, 
had  secured  in  payment  of  one  of  the  said  notes,  so  transferred  to  said  Jno.  Henshaw  and  others, 
and  which  the  respondent  took  for  the  purpose  of  delivering  to  said  Bank.  Wherefore  this  respon- 
dent prays  the  judgment  of  said  court,  and  for  his  costs. 

Sworn  to,  &c.  S.  S.  LEWIS. 


A. 

Mr.  Gilpin  to  Mr.  Mills,  July  18,  1838. 

Office  oftite  Solicitor  of  the  Treasury,  July  18,  1838. 

SIB, — I  have  this  morning  received  from  the  Secretary  of  the  Treasury  a  slip  from  the  Boston 
Times  of  the  13th  inst.,  in  relation  to  the  debt  due  the  United  States  by  the  Commonwealth  Bank, 
respecting  which  I  wrote  you  yesterday.  The  statements  made  in  that  article  are  of  so  serious  a 
character,  not  merely  as  affecting  the  interest  of  the  United  States,  but  the  official  conduct  of  your- 
self and  the  Marshal,  that  you  will  be  sensible  of  the  necessity  of  a  prompt  and  full  explanation  of 
all  the  proceedings  in  this  case.  I  have  to  request  that  this  may  be  accompanied  with  full  copies 
of  the  records,  judicial  proceedings,  and  written  instruments  connected  with  it. 

It  is  not  possible  to  believe,  as  is  stated,  either  that  the  personal  securities  of  the  Warren 
Association,  which  formed  a  portion  of  the  assets  of  the  Bank,  actually  attached  by  the  Marshal,  as 
mentioned  in  your  letter  of  the  1st  March  last,  can  have  been  surrendered ;  or  what  would  be  still 
more  extraordinary,  that  under  any  arrangement,  compromise,  or  color  of  legal  proceedings,  real 
property,  which  cost  but  two  and  a  quarter  cents  a  foot,  and  would  now  bring  but  one  and  a  half 
cents  a  foot,  should  have  been  appraised  and  received  by  the  officers  of  the  United  States  at  the 
enormous  price  of  fifteen  cents  a  foot. 

If  either  of  these  transactions  has  taken  place,  it  must  be  regarded  as  a  very  great,  not  to  say 
fraudulent,  violation  of  the  rights  and  interest  of  the  United  States.  Upon  that  ground  an  imme- 
diate application  ought  to  be  made  to  the  Court,  to  which  the  execution  is  returnable,  to  set  aside 
the  appraisement,  and  set-off,  alleged  to  have  been  made  under  it ;  taking  care,  however,  to  pre- 
serve the  levy.  At  the  same  time  I  have  to  request,  that,  if  not  already  done,  proceedings  may  be 
forthwith  instituted,  either  under  the  act  of  20th  April,  1818,  or,  what  I  should  deem  more  advisable, 
in  chancery,  against  the  debtors  of  the  Commonwealth  Bank,  including  the  members  of  the  Warreu 
Association. 

In  the  present  position  of  this  case,  the  most  prompt,  energetic,  and  thorough  measures  must  be 
taken  without  delay,  to  protect  the  interests  of  the  United  States.     This  is  due,  not  merely  as  a 
matter  of  right  to  them,  but  for  the  vindication  of  the  official  character  of  their  agents. 
Very  respectfully,  your  obedient  servant. 

R.  D.  GILPIN,  Solicitor. 

JOHN  MILLS,  Esq.,  District  Attorney,  Boston,  Mass. 

B, 

Mr.  Milts  to  Mr.  Gilpiti,  July  25,  1838  ;  as  to  selection  of  Appraisers. 

U.  S.  District  Attorney's  Office,  Boston,  July  25,  1838. 

SIK, — Your  letters  of  the  17th  and  18th  of  July  current,  have  been  received.  In  relation  to  the 
statement  in  the  slip  from  the  Boston  Times,  you  request  me  to  give  you  a  "  prompt  and  full 
explanation  of  all  the  proceedings  in  the  case." 

My  former  letters  have  informed  you  of  the  commencement  of  the  suits  and  of  the  proceedings 
against  the  Commonwealth  Bank  and  its  surelies.  On  the  first  of  March  last,  I  stated  the  proposi- 
tion that  had  been  made  by  the  counsel  of  the  Bank  and  the  Warren  Association,  and  that  I 
believed  it  would  be  for  the  interest  of  the  United  States  to  accept  the  proposition.  Your  answer 
of  the  6th  of  the  same  month  I  considered  an  approval  of  the  arrangement.  About  this  time,  Mr. 
Henshaw  went  to  Washington,  and  had  conversation  with  you  on  the  subject.  This  I  learnt  by 
your  letter  of  the  9th  of  April.  To  avoid  any  misapprehension  in  relation  to.  the  business,  I  trans-, 
milled  to  your  office  the  written  proposition  of  the  counsel  for  the  Bank.  This  was  substantially 
the  same  as  that  previously  communicated.  In  your  reply  (May  4.-  1838,)  you  gave  your  sanction 
to  the  arrangement,  "  if  the  modes  of  proceeding  or  execution  process  authorized  the  setting  off  of 
real  property  by  appraisal."  No  one  acquainted  with  all  the  circumslances,  and  whose  mind  is 
free  from  prejudice,  would  doubt  for  a  momenl  that  this  arrangement  was  favorable  for  the  U, 
States.  Suppose  thai  judgment  had  been  rendered  against  ihe  Association  on  those  notes,  and  that 
execution  haxl  then  been  in  the  hands  of  an  officer,  which  would  have  been,  thought  the  wiser 
course,  to  levy  that  execution  on  the  lands  of  the  Association,  agreeably  to  the  laws  in  this  District, 
or  seek  a  doubtful  remedy  against  its  individual  members?  It  appears  to  me  that  no  creditor,  hav- 
ing regard  to  his  own  interest,  would  hesitate  to.  take  the  former  course.  I  suppose  then  that  the 
"fraud  upon  the  Government,"  if  any,  consists  in  making  the  levy — the  selection  o.f  incompetent, 
interested  or  dishonest  men,  for  appraisers.  By  the  laws  in  this  District,  one  of  the  appraisers  is  to 
be  appointed  by  the  officer,  one  by  the  creditor,  and  one  by  the  deblor.  As  ihe  Marshal  had  for- 
merly been  a  member  of  the  Association,  we  botli  considered  it  improper  for  him  to  make  a  selec- 


tion,  but  he  agreed  to  appoint  any  one  that  I  should  designate.  This  gave  me  the  selection  of  two. 
To  prevent  the  possibility  of  any  improper  interference,  I  refused  to  give  the  names  of  the  apprai- 
sers till  the  day  the  levy  was  made,  and  did  not  do  it  till  10  o'clock  on  the  morning  of  that  day, 
barely  in  season  for  the  Marshal  to  give  them  notice  of  their  appointment.  I  selected  Judge  Mer- 
rill and  Mr.  Gurney. 

Mr.  Merrill  is  a  Judge  of  the  Police  Court,  and  recently  Senator  in  the  State  Legislature.  Mr. 
Gurney  is  an  Alderman,  and  is  now  a  State  Senator.  Their  honesty  and  integrity  have  never  been 
questioned.  They  are  acquainted  with  the  real  estate  in  all  sections  of  the  city,  and  have  been 
frequently  employed  as  appraisers  of  land  set  off  on  execution.  I  am  not  personally  acquainted 
with  Mr.  Binney,  the  other  appraiser,  but  he  has  the  reputation  of  being  an  intelligent,  high- 
minded,  honest  man. 

The  appraisers  met  at  the  Marshal's  office.  I  there  made  the  enquiry  whether  they  were  mem- 
bers of  the  Warren  Association,  or  had  any  interest  in  that  concern,  or  in  the  Commonwealth 
Bank,  and  also  whether  there  had  been  any  recent  inquiries  of  them  respecting  the  value  of  the 
lands  of  the  Association,  or  of  other  lands  in  South  Boston.  They  gave  a  negative  answer  to  each 
of  these  interrogatories.  We  then  proceeded  to  view  the  lands.  I  remained  with  them  the  whole 
time.  They  then  adjourned  to  meet  at  Mr.  Merrill's  office  at  8  o'clock  the  next  morning.  I  have 
since  been  informed  by  the  chairman  (Judge  Merrill)  that  at  their  meeting  each  handed  in  his  esti- 
mate, and  soon  fixed  upon  15  cents  a  foot,  there  being  but  little  variance  in  their  several  estimates. 
I  am  not  acquainted  with  the  value  of  real  estate  in  the  city,  but  I  think  the  appraisal  is  high.  I 
know  there  are  others,  who  are  good  judges  of  the  property  and  disinterested,  who  would  consider 
it  a  fair  appraisal. 

I  hope  this  statement  will  be  satisfactory.  Should  it  not  be,  I  will  endeavor  to  answer  any  par- 
ticular inquiry  you  may  make.  The  execution  is  now  in  the  Register's  office,  but  the  Marshal 
will  transmit  a  copy  in  his  next  return,  or  sooner,  if  desired. 

In  regard  to  proceedings  under  the  Act  of  20th  April,  1818,  as  suggested  in  your  letters,  I  would 
state,  that  the  notes  given  by  the  Treasurer  of  the  Association  were  negotiable,  and  were  passed  by 
the  Bank  to  the  sureties  early  in  January.  Under  these  circumstances,  the  Association,  in  my 
opinion,  could  not  be  held  as  the  Trustee  of  the  Bank.  But  if  it  could,  if  execution  had  been 
obtained  against  the  Association  on  its  answer,  it  could  have  been  satisfied  only  by  a  levy  on  the 
real  property.  I  am  sir,  very  respectfully,  your  obedient  servant, 

(Signed)        JOHN   MILLS,  District  Attorney. 

HON.  H.  D.  GILPIN. 

c 

Statement  of  the  Appraisers. 

Boston,  September  8tk,  1838. 

GENTLEMEN, — Representations  have  been  made  to  the  Solicitor  of  the  Treasury,  that  the  apprai- 
sers of  the  lands  recently  set  off  on  execution  in  favor  of  the  United  States  against  the  Common- 
wealth Bank,  made  two  valuations  of  the  same.  That  the  first  appraisal  was  made  to  ascertain  the 
quantity  of  land  which  the  Warren  Association  should  convey  to  the  Bank  in  discharge  of  their 
notes,  and  that,  after  the  conveyance  was  made,  they  went  through  "  the  mock  ceremony  "  of  a 
second  valuation  on  the  execution. 

In  consequence  of  these  representations,  I  take  the  liberty  of  requesting  you  to  give  me  a  written 
answer  to  the  following  interrogatories  : 

1.  Did  you  make  more  than  one  valuation  of  the  lands  levied  on  by  an  execution  in  favor  of  the 
U.  States  against  the  Commonwealth  Bank  in  May  last? 

2.  Did  you  ever  examine  the  lands  levied  upon  for  the  purpose  of  making  a  valuation  of  them 
before  you  were  sworn  as  appraisers  on  the  execution  ? 

3.  Did  you,  before  you  had  fixed  upon  the  valuation,  know  or  hear  of  any  appraisal  of  those 
lands  being  made  at  the  time  they  were  conveyed  to  the  Bank,  or  did  you  know  what  consideration 
was  expressed  in  the  deed  from  the  Trustees  of  the  Warren  Association  to  the  Bank? 

4.  Did  you  know  of  any  intention  to  appoint  you  appraisers,  till  you  were  notified  of  your 
appointment  by  the  Marshal  or  his  Deputy  ? 

5.  At  what  time  in  the  day  were  you  notified  of  your  appointment,  and  how  soon  afterwards  did 
you  view  the  lands  ? 

I  think  it  proper  to  state,  that  I  shall  transmit  your  answer  to  these  questions  to  the  Solicitor's 
office.  I  am,  gentlemen,  very  respectfully  yours, 

JOHN   MILLS. 
To  JAMES  C.  MERRILL, 
NATIIAN  GURNEY, 
AMOS  BINNEY,  Esq'rs. 

To  the  annexed  interrogatories,  we  answer  as  follows  : 

To  the  first,  second,  third  and  fourth,  NO. 

In  answer  to  the  fifth,  we  say  we  were  notified  of  our  appointment  but  a  short  time,  probably  not 
more  than  an  hour  before  we  were  sworn,  and  did  not  know,  until  the  time  of  being  sworn,  who 
were  the  parties  or  what  was  the  property  to  be  appraised.  We  proceeded  to  view  the  premises 
6 


42 

immediately  after  the  oath  was  administered.    We  did  not  know,  at  the  time  of  the  appraisement, 
the  amount  due  from  the  Warren  Association-  to  the  Bank. 

JAMES  C.  .MERRILL, 
NATHAN  GURNEY, 
September  U,  1838. 

I  concur  in  the  above  answers,  with  one  exception, — that  several  days  previous  to  the  appraise- 
ment  I  was  asked  whether  or  not  I  would  act  as  appraiser  in  a  case  between  the  United  States  andl 
the  Commonwealth  Bank,  to  which  I  replied  that  I  would  if  appointed.  No  further  conversation 
on  the  subject  was  held  by  the  gentleman  enquiring,  and  me,  before  the  appraisement. 

AMOS  BINNEY. 

September  15,  1838. 


1>,  page  12—23* 

Report  of  District  Attorney  to  the  Solicitor. 

U.  S.  District  Attorney's  Office,  Boston,  August  6,  1838. 

SIR, — In  compliance  with  your  letter  of  the  30th  of  July  last,  requesting  a  full  report  of  the 
proceedings  that  have  taken  place  in  relation  to  the  claims  of  the  United  States  against  the  Com- 
monwealth Bank,  the  District  Attorney  has  the  honor  to  submit  the  foHowiirg 

REPORT: 

On  January  22,  1838,  the  District  Attorney  received  from  the  Solicitor  of  the  Treasury,  a 
Treasury  Transcript  stating  a  balance  due  to  the  United  States  from  the  Commonwealth  Bank,  of 
$51,749  90;  also  a  copy  of  a  bond  executed  by  the  officers  of  that  Bank  and  other  persons  as- 
sureties,  dated  February  14.  1837,  with  instructions  to  institute  legal  proceedings. 

An  action  to  recover  the  sum  aforesaid  was  commenced  against  the  Bank  and  sureties  on  the 
same  day. 

As  there  was,  in  the  opinion  of  the  District  Attorney,  some  doubt  whether  an  action  ctnild  be 
sustained  against  the  Bank  on  that  bond,  an  action  for  money  had  and  received  was  brought 
against  the  Bank  at  the  same  time.  The  damages  were  laid  in  each  case  at  §75,000.  No  property 
was  attached  by  the  Marshal  in  either  case  ;  but,  as  security  for  this  claim,  the  officers  of  the 
Bank  delivered  to  (he  District  Attorney  certain  promissory  notes  described  in  his  receipt,  a  copy  oi' 
which  (a)  accompanies  this  report. 

On  the  30th  of  January,  1838,  a  letter  Was  received  from  the  Solicitor,  enclosing  a  communication 
from  the  Secretary  of  the  Treasury,  under  date  of  January  24th,  stating,  that  "  besides  the  balance 
standing  against  the  Commonwealth  Bank,  upon  the  books  of  the  Treasurer,  it  is  understood  that 
considerable  sums  of  public  money  which  were  placed  there  by  collecting  and  disbursing  officers, 
still  remain  in  deposit  with  the  Bank.  As  these  balances  are  included  in  the  liabilities  of  the 
Bank  to  the  United  States,  and  are  covered  by  the  bond  executed  in  its  behalf,  I  have  to  request 
that  the  District  Attorney  may  be  instructed  to  keep  them  in  view  in  any  course  he  may  adopt  for 
the  protection  of  the  interest  of  the  United  States.  Their  amount  can  all  be  ascertained  at  Boston." 
The  books  of  the  Bank  were  immediately  examined,  and  the  amount  due  to  the  United  States 
ascertained.  On  the  same  day  actions  were  commenced  against  the  several  sureties  on  the  bond 
of  February  14,  1837.  The  damages  in  each  case  were  stated  at  $400,000.  Endorsed,  "Attach 
sufficient.  J.  Mills,  District  Attorney."  The  Marshal  returned  on  the  writ  against  Samuel  S.  Lewis, 
one  of  the  sureties,  as  follows,  to  wit :  "United  States  of  America,  Mass.  District,  Boston,  February 
2,  1838.  By  virtue  of  this  writ,  I  have  attached  certain  promissory  notes  and  demands,  turned 
out  to  me  by  Samuel  S.  Lewis,  the  within  named  defendant,  and  David  Henshaw,  as  security  ta 
satisfy  any  judgment  or  judgments  which  may  be  recovered  in  favor  of  the  United  States,  on  this 
writ,  or  either  or  all  of  the  following  writs  in  my  hands  for  service  ;  severally  against  John  Hen- 
shaw.  Elisha  Parks,  F.  S.  Carruth,  Otis  Rich,  'William  Freeman,  Hall  J.  How,  Oliver  Fletcher 
fcnd  Adams  Bailey.  Said  United  States  are  plaintiffs  in  each  of  said  suits,  and  the  writ  in  each  of 
them  bears  date  January  30th,  1838,  and  is  returnable  to  the  U.  S,  District  Court,  to  "be  holden  at 
Boston  on  the  third  Tuesday  of  March,  1838.  Jonas  L.  Sibley,  Marshal/'  A  similar  return  was 
made  on  the  other  writs.  It  is  understood  that  the  Marshal  has  in  his  possession  a  list  of  the 
securities  referred  to  in  the  foregoing  return,  but  he  is  now  absent,  and  as  it  is  with  his  private 
papers,  a  copy  cannot  be  obtained  till  he  returns.  [A  copy  subsequently  obtained  is  appended  to 
this  report,  (d)] 

On  the  13th  of  February,  1838,  a  letter  was  received  from  the  Solicitor,  dated  February  9th, 
enclosing  a  certified  copv  of  the  contract  of  the  Bank  with  the  Secretary  of  the  Treasury,  dated 
July  15,  1S36.  On  the  2"3d  of  February,  a  suit  was  brought  against  the  Bank  on  this  contract. 
The  Marshal  returned  on  this  writ  that  "  he  had  attached  all  the  lands  belonging  to  the  Bank,  within 
his  precincts." 

These  actions  were  all  entered  at  the  March  term  of  the  District  Court,  and  all  stand  con- 
tinued, except  the  one  against  the  Bank  for  money  had  and  received,  commenced  on  the  22d  of 
January. 

The  securities  attached  on  the  writs  against  the  sureties,  as  stated  in  the  return  on  the  writ 


n 

against  Lewis,  were  never  under  the  control  or  management  of  the  District  Attorney.  They  never 
Ibelonged  to  the  United  States.  They  were  transferred  by  the  Bank  to  the  sureties  as  collateral 
security  to  indemnify  them  for  any  judgment  that  might  .be  rendered  against  them  as  sureties  to 
the  Bank.  The  sureties  proposed  to  place  these  claims  in  the  hands  of  the  Marshal  to  satisfy  any 
judgment  that  might  be  rendered  against  them  in  those  actions.  As  several  of  the  sureties  had 
failed,  and  as  -real  estate  {except  about  10^000  dollars)  was  the  only  property  of  the  solvent  sureties 
that  could  'be  attached,  it  was  considered  to  be  the  interest  of  the  United  States  to  take  a  transfer 
of  these  promissory  notes.  But  it  will  be  recollected  that  the  Marshal  did  not  hold  these  securities 
to  respond  any  judgment  against  the  Bank,  but  such  only  as  may  be  recovered  on  the  suits  now 
pending  against  them,  and  ia  which  they  contest  their  liability.  Of  these  securities  thus  trans- 
ferred to  the  Marshal  and  for  that  specific  purpose,  -were  notes  of  the  Warren  Association,  amount- 
ing to  §160,000,  all  of  which  were  oa  time.  The  former  letters  of  the  District  Attorney  have 
acquainted  the  .Solicitor  of  the  Treasury  with  all  the  negotiations  respecting  the  manner  of  paying 
these  notes.  The  only  proposition  in  writing  ever  submitted  to  the  District  Attorney  was  trans- 
mitted to  the  Solicitor  of  the  Treasury  on  the  25th  of  April,  1838.  After  the  receipt  of  the  So- 
licitor's letter,  of  May  4th,  an  agreement  was  entered  into,  of  which  the  accompanying  paper  (b) 
is  a  copy. 

It  will  appear  by  the  copy  of  the  record,  in  the  case  of  the  United  States  against  the  Bank,  (c) 
that  the  writ  was  amended  aad  judgment  rendered  by  consent  for  $325,517  55.  By  the  agreement, 
judgment  was  to  be  rendered  for  $345,517  55.  After  the  agreement  was  executed,  it  was  recol- 
lected that  there  was  an  attachment  of  land  on  the  writ,  dated  February  23d,  and,  as  there  might 
be  subsequent  attachments  of  the  same  land  on  suits  pending  in  the  State  courts,  the  balance  was 
left  for  the  judgment  in  the  action  of  the  23d  of  February. 

A  copy  of  the  execution,  with  the  doings  of  the  appraisers  and  return  of  the  Marshal,  is  herewith 
transmitted.  The  document  is  marked  (4).  The  letter  of  the  District  Attorney,  dated  July  28, 
1838,  states  all  of  the  facts  (so  far  as  they  are  known  to  him)  in  regard  to  the  appointment  of 
appraisers  and  the  proceedings  at  the  time  of  the  levy.  To  that  statement  he  has  nothing  to  add 
or  diminish.  It  seems,  however,  that  the  point  on  which  the  Solicitor  of  the  Treasury  asks  par- 
ticular explanation,  is  stated  in  the  following  extract  from  his  ktter,  bearing  date  July  30th,  1838. 
•"  The  allegations  made  to  the  Secretary  of  the  Treasury,  and  from  respectable  sources,  were,  that 
under  color  of  this  legal  process,  land  which  was  lately  bought  for  two  and  a  quarter  cents  a.  foot, 
and  would  new  -bring  but  one  and  a  half  cents  a  foot,  was  set  off  to  the  United  States  at  fifteen 
cents  a  foot — thus,  in  fact,  crediting  the  Judgment  of  the  United  States  with  $166,000,  when  the 
land  was  worth  but  $10,000  ;  that  the  legal  officers  of  the  United  States  stood  by  and  acquiesced 
in  this  appraisement ;  and  that  after  it  was  made  they  surrendered  valuable  personal  securities 
without  their  being  legally  satisfied.1'  The  District  Attorney  does  not  know  the  costs  of  this  land 
to  the  Association,  nor  does  he  think  it  material  to  enquire,  as  they  were  purchased  several  years 
since,  and  as  there  have  been  great  improvements  and  great  increase  of  population  in  that  part  of 
the  city  since  the  original  purchase.  "  And  would  not  nmv  bring  but  one  and  a  half  cents  afoot."  This 
allegation  is  flatly  denied,  and  the  "respectable"  person  who  made  the  communication  to  the 
Secretary  of  the  Treasury,  must  plead  gross  ignorance  upon  the  subject,  to  screen  himself  from  the 
'charge  of  malicious  falsehood.  "  That  the  kgal  officers  of  the  United  States  stood  by  and  acquiesced  in 
this  appraisement."  If  by  this  it  is  insinuated  that  the  officers  of  the  United  States  acquiesced  in 
any  fraudulent  act,  it  can  hardly  be  expected  that  they  will  criminate  themselves  and  plead  guilty 
to  the  charge.  If  the  proceedings  were  legal  and  fair,  there  was  nothing  to  which  an  objection 
could  be  made.  On  this  point,  the  District  Attorney  will  go  no  further  than  to  repeat — that  he 
selected  two  of  the  appraisers,  men  competent  to  discharge  the  duty  to  which  they  were  appointed, 
well  acquainted  with  the  value  of  such  lands,  and  whose  character  for  honesty  and  integrity  will 
not  be  questioned  even  by  the  "  respectable  "  .informant  of  the  Secretary  of  the  Treasury.  "  They 
surrendered  valuable  personal  securities  Without  their  being  legally  satisfied."  This  brings  up  again  the 
Question  of  fraud.  If  the  transaction  is  fraudulent  the  proceedings  are  void  and  not  binding  on 
the  United  States.  But  if  the  lands  were  fairly  and  legally  appraised  at  $166,437  90,  why  should 
not  securities  to  that  amount  be  surrendered  ?  It  could  not  be  supposed  that  the  United  States 
would  hold  the  land  and  securities  too.  After  the  levy  was  completed,  the  District  Attorney  had 
no  hesitation  in  directing  the  Marshal  to  give  up,  to  be  cancelled,  the  notes  of  the.  Association  to 
that  amount.  Nor  had  he  any  suspicion  that  tire  legality  of  the  act  was  any  more  to  be  questioned 
than  it  would  be  had  the  payment  been  made  in  cash.  He  has  never  entertained  or  stated  any 
proposition  or  arrangement  by  way  of  compromise  or  relinquishment  of  any  existing  liabilities, 
without  legal  satisfaction ;  nor  did  he  permit  the  notes  of  the  Association  to  be  surrendered,  till 
their  full  amount,  of  principle  and  interest,  had  been  legally  satisfied.  .  , 

From  the  best  information  the  District  Attorney  has  upon  the  subject,  he  considers  the  real 
value  of  the  land,  set  off  on  the  execution,  to  be  not  less  than  twelve  and  a  half  cents  a  foot,  but 
be  knows  it  is  the  opinion  of  others,  who  are  good  judges,  that  the  appraisement  is.  hot  too  high. 
He  has  not  heard  but  a  single  individual  (William  Wright)  who  knew  anything  qf  the  lands,  estt- 
tnate  them  at  less  than  twelve  and  a  half  cents  a  foot.  There  is  not  a  single  circumstance  known 
to  the  District  Attorney  that  will  authorize  an  application  to  the  court  to  set  aside  the  levy.  There 
was  no  mistake  or  misrepresentation  in  relation  to  the  lands.  The  appraisers  had  the  plan  before 
ihem,  and  they  entered  upon  and  viewed  the  several  lots.  , 

It  appears  by  the  Marshal's  return  .on  the  execution  that  $iC9,052  49  have  been  paid,  leaving 
an  unsatisfied  balance  of  $156,483  97.  The  damages  to  be  rendered  in  the  other  case  will  not 
vary  much  from  $23,000.  The  cash  credit  on  the  execution,  was  by  a  payment  of  Mr.  Henshaw's 


44 

on  one  of  his  notes  mentioned  in  the  receipt.    In  the  absence  of  the  Marshal,  the  value  of  the 
securities  now  in  his  hands  cannot  be  stated  with  accuracy.    Their  value  is  estimated  at  $105,000 

Land  under  attachment  "at 15,000 

Balance  of  notes  now  in  the  hands  of  the  District  Attorney, 37,420 

$  157,420 

If  this  estimate  is  correct,  and  the  assets  in  the  hands  of  the  Marshal,  are,  when  collected,  applied 
on  the  execution,  it  will  leave  a  balance  of  $22,063  97,  besides  the  balance  of  interest. 

If  the  actions  against  the  sureties  on  the  bond  of  February  14,  1837,  are  sustained,  and  they  held 
liable  for  the  whole  debt  due  from  the  Bank,  the  United  States  will,  unquestionably,  be  paid  in  full. 
If,  however,  the  sureties  should  be  discharged,  a  process  will  be  immediately  instituted  to  retain 
for  the  United  States,  the  securities  now  held  by  the  Marshal.  From  these,  and  from  other  debtors 
to  the  Bank,  included  in  the  bill  in  Equity,  it  is  confidently  believed  that  enough  will  be  collected 
to  discharge  the  debt  due  the  United  States. 

It  will  be  seen  that  two  of  the  notes  in  the  hands  of  the  District  Attorney  are  payable  in  a  few 
days,  and  the  other,  for  86000,  not  till  October,  1839.  Mr.  Henshaw  will  ask  an  indulgence  for  a 
part  of  the  notes  payable  on  the  12th.  Would  it  not  be  expedient  to  propose  to  him  an  equation 
of  payments,  by  which  the  whole  shall  be  paid  before  the  first  of  December  next  ?  No  opinion  is 
expressed  as  to  the  time  when  the  securities  held  by  the  Marshal  will  be  paid.  It  is  hoped  there 
will  be  but  a  small  balance,  if  any,  due  to  the  United  States,  on  the  first  of  January  next. 

(Signed,)        JOHN   MILLS,  U.  S.  District  Attorney. 

To  the  Solicitor  of  the  Treasury. 

Note  (I  of  Document  D. 

Eeceipt  for  Collateral  deposited  with  the  District  Attorney. 

Received  of  Charles  Hood,  Cashier  of  the  Commonwealth  Bank,  a  note  signed  by  John  Henshaw, 
as  principal,  Charles  Henshaw  and  David,  sureties,  dated  January  10,  1838,  payable  in  seven 
months,  for  $21,420.  A  note  signed  by  Henshaw,  "Ward  &  Co.,  payable  to  David  Henshaw, 
and  by  him  endorsed,  dated  Oct.  20,  1837,  for  $6000,  payable  in  24  months  from  date,  with  interest. 
Also  a  note  signed  by  Hall  J.  How,  for  the  late  firm  of  Hall  and  Jones,  dated  January  9,  1838,  for 
$15,000,  payable  to  the  late  firm  of  Henshaw  <te  Co.,  and  by  them  endorsed,  payable  in  seven 
months,  which  notes  are  also  endorsed  by  the  said  Cashier.  The  notes  aforesaid  I  am  to  hold  as 
security  for  a  balance  due  from  the  Commonwealth  Bank  to  the  United  States,  of  851,749  90,  as 
appears  by  the  Treasury  Transcript,  but  is  only  $39,636  93,  as  appears  by  the  books  of  the  Bank. 

JOHN  MILLS,  District  Attorney. 

January  22,  1838. 

Note  &  of  Document  D. 

Massachusetts,  Boston,  May  11,  1838. — United  States  District  Court. 
The  United  States,  vs.  Commonwealth  Bank,  No.  18. 

AN    AGREEMENT    OF    TWO   PARTS. 

In  the  above  entitled  action  it  is  agreed  as  follows,  viz.  : 

1.  The  Plaintiffs'  damages  alleged  in  the  writ  in  said  action  shall  be  increased,  and  be  stated  to 
be  three  hundred  and  fifty  thousand  dollars. 

2.  Judgment  shall  be  rendered  in  said  action  in  favor  of  the  Plaintiffs,  for  the  sum  of  three  hun- 
dred and  forty-five  thousand  five  hundred  and  seventeen  dollars  fifty-five  cents,  being  the  amount 
specified  in  the  Plaintiffs'  bill  of  particulars,  filed  in  said  action.     Execution  shall  issue  for  that  sum 
and  the  costs  of  said  suit  without  delay. 

3.  Jonas  L.  Sibley,  Esq.,  the  Marshal  of  the  United  States,  shall  levy  said  execution  on  such 
lands  as  the  Warren  Association  or  its  Trustees  shall  convey  to  said  Bank.     In  making  said  levy, 
no  part  of  said  land  shall  be  sold  by  the  Marshal,  but  the  same  shall  be  set  off  on  said  execution 
by  appraisement. 

4.  The  amount  at  which  said  lands  shall  be  appraised  as  aforesaid,  shall  be  appropriated  to  the 
relief  of  the  sureties  of  said  Bank,  in  a  bond  made  to  said  United  States  in  the  penal  sum  of  five 
hundred  thousand  dollars,  by  John  K.  Simpson  as  President,  and  Charles  Hood  as  Cashier,  in 
behalf  of  said  Bank,  and  by  Adams  Bailey  and  others  as  sureties,  bearing  date  February  14,  1837. 
And  said  lands  are  hereby  appropriated,  at  said  appraised  value  thereof,  (so  far  as  said  appraise- 
ment may  extend,)  to  the  relief  of  said  sureties,  and  in  satisfaction  (to  the  extent  aforesaid)  of  the 
amounts  for  which  they  may  be  liable  on  said  bond. 

5.  As  the  said  Marshal  holds  promissory  notes  and  other  written  promises  made  by  or  on  behalf  of 
said  Warren  Association,  as  collateral  security  for  the  protection  of  said  sureties,  which  notes  and 
promises  were  recently  held  by  the  said  Bank,  and  are  to  be  paid  by  said  lands  so  far  as  they  may 
be  sufficient,  at  said  appraisement ;  it  is  agreed  that  the  said  Marshal  shall  continue  to  hold  the 
same  till  the  completion  of  said  levy ;  and  that  immediately  after  its  completion,  said  notes  and 


45 

promises,  to  the  amount  of  said  appraisement  shall  be  surrendered  by  said  Marshal  to  John  Pick- 
ering. Esq.,  or  either  of  the  Trustees  of  said  Association. 

6.  The  Register  of  Deeds  for  the  county  of  Suffolk,  shall  certify  in  writing  that  the  title  of  the 
lands  levied  upon  as  aforesaid  is  good. 

7.  The  sureties  on  the  said  bond  and  other  subscribers  hereto,  subscribe  this  agreement  in  token 
of  their  assent  to  it ;  this  agreement  having  been  made  by  the  request  of  said  sureties  so  far  as  it 
regards  said  application.    Neither  of  said  sureties  hereby  waives  any  defence  by  admission  or 
otherwise,  which  he  would  have  had  if  this  agreement  had  not  been  made,  but  will  make  no  objec- 
tion founded  merely  on  the  fact  of  this  arrangement  having  been  made  between  the  Plaintiffs  and 
said  Bank. 

8.  The  said  U.  States  by  their  Attorney,  and  said  Bank  by  its  President,  subscribe  this  instru- 
ment and  one  other  of  like  tenor  and  date. 

WM.  FREEMAN,  President  pro.  tern.,  for  Commonwealth  Bank. 

CHARLES   HOOD. 

SAMUEL  S.  LEWIS. 

WM.  FREEMAN. 

ELISHA  PARKS. 

F.  S.  CARRUTH. 

OLIVER  FLETCHER. 

A.  BAILEY. 

JOHN  HENSHAW. 

HALL  J.  HOW. 

OTIS  RICH. 

JOHN  MILLS,  U.  S.  District  Attorney. 

Note  C  of  Document  D. 

Judgment  of  the  U.  S.  Court)  vs.  the  Bank. 

UNITED  STATES   OF  AMERICA. 
Massachusetts  District,  ss. 

AT  a  District  Court  of  the  U.  States,  begun  and  holden  at  Boston,  within  and  for  the  District  of 
Massachusetts,  on  the  third  Tuesday  (being  the  nineteenth  day)  of  March,  in  the  year  of  our  Lord 
one  thousand  eight  hundred  and  thirty-eight.  Before  the  Honorable  John  Davis,  Judge. 

The  United  States  of  America,  Plaintiffs,  versus  the  President,  Directors  and  Company  of  the  Com- 
monwealth Bank,  in  the  city  of  Boston,  a  corporation  by  the  laws  of  the  State  of  Massachusetts. 
Defendants.  In  a  plea  of  the  case,  for  that  the  said  Commonwealth  Bank,  at  said  Boston,  to  wit, 
on  the  day  of  the  date  of  this  writ,  being  indebted  to  the  said  United  States  in  the  sum  of  four  hun- 
dred thousand  dollars,  for  so  much  money  then  before  that  time,  by  the  said  Commonwealth  Bank, 
of  the  said  United  States,  to  their  use  had  and  received,  in  consideration  thereof  promised  the  said 
United  States  to  pay  them  the  said  sum  on  demand ;  yet  the  said  Commonwealth  Bank,  although 
often  required,  has  not  paid  to  the  said  United  States  the  said  sum ;  but  hitherto  altogether  has  and 
still  does  refuse  to  pay  the  same.  To  the  damage  of  the  said  United  States,  as  they  say,  the  sum 
of  three  hundred  and  fifty  thousand  dollars. 

This  action  was  entered  at  the  present  term  of  this  Court,  when  and  where  the  Marshal  returned 
that  he  attached  a  chip,  the  property  of  the  Commonwealth  Bank,  and  gave  in  hand  to  Charles  Hood, 
Esq.,  Cashier  of  said  Bank,  a  true  and  attested  copy  of  the  said  writ,  for  their  appearance  at 
Court. 

And  now  the  parties  appear,  and  upon  motion  of  the  Defendants'  counsel,  it  is  ordered  that  the 
Plaintiffs  file  a  Bill  of  Particulars ;  whereupon  the  following  Bill  of  Particulars  is  filed  : 
The  Commonwealth  Bank  to  the  U.  States,  Dr.,  January  12, 1838. 

Balance  of  deposits  due  to  the  Pension  Department, $152,68421 

Treasurer  of  the  United  States, 39,636  93 

Post  Office  Department, 7,806  99 

D.  S.  Townsend,  Army  Paymaster, , 1.167  32 

Collector  of  the  Port  of  Boston, 65,91177 

Commissioners  for  building  Custom  House, 71,555  38 

H.  H.  Craig,  Master  of  Ordnance, 534 


$338,797  9 1 
Interest  to  llth  May,  1838,  6,719  61 

$345,517  55 

And  afterwards  the  Defendants,  although  solemnly  called  to  come  into  Court,  do  not  appear,  but 
make  default ;  whereupon,  by  consent  of  parties,  judgment  is  entered  for  the  Plaintiffs  in  the  sum 
of  three  hundred  and  twenty-five  thousand,  five  hundred  and  seventeen  dollars,  fifty-five  cents.  It 
is  therefore  considered  by  the  Court  that  the  said  United  States  of  America  recover  against  the  said 
President,  Directors  and  Company  of  the  Commonwealth  Bank,  the  sum  of  three  hundred  and 
twenty-five  thousand,  five  hundred  and  seventeen  dollars,  fifty-five  cents,  damage,  and  costs  of  suit 
taxed  at  seventeen  dollars  and  ninety -one  cents. 

A  true  copy, 

Attest:  FRANCIS  BASSE TT,  Clerk. 


46 


do. 
do. 
do. 
do. 
do. 


Note  fl  ot  Document  1>. 

Collateral  dtlivered  to  U.  S.  Marshal  to  secure  sureties. 


Association, 


do 
do 
do 
do 
do 


SCHEDULE. 

.     date  Nov.   28,  1837,    8  mo. 


29, 
30, 

"  27, 
Dec.  1, 

"        2, 


10 
12 
7 

14 
16 


Hall  J.  How,       , Sept.  14th,  1835,  6  mo. 


3.  &  H.  J.  How  &  Co.,  by  Hall  J.  How, 

and  How  &  Jones,  surety,       ... 
Memorandum   check   of  New  England 


May  26th,  1834.  6  mo.    .     . 
Dec.  24th,  1836,  on  demand, 


Glass  Company, 

Memorandum  check  of  same  Co.,  ..."  Feb.  23d,  1836,       .     "     . 

Promissory  note,  Wm.  Parmenter,  Jttne  13,  1837,  due  Aug.  1st,  1838, 

Promissory  note  of  Hall  J.  How,  Jan.  15,  1838,  on  demand, 

do.          "    of  John  Henshaw,  as  principal,  and  David 

Henshaw  and  Charles  Henshaw,  as  sureties,  dated 

January  10,  1838,  dire  in  eight  months  after  date, 


$25,000  00 
25,000  00 
25,000  00 
25,000  00 
30,000  00 
30,000  00 

8160,000  00 
11,500  00 

7,500  00 

30,000  00 

14,000  00 
10,000  00 
33,495  00 

13,531  12 
$280,026  12 


Boston,  Feb.  2d,  1838. 

The  above  is  a  schedule  of  notes  and  demands  delivered  to  me  by  Samnel  S.  Lewis,  and  David 
Henshaw,  as  security  to  satisfy  any  judgments  which  may  be  recovered  in  favor  of  the  U.  States, 
6n  writs  now  in  my  hands  for  service  against  the  following  persons,  viz. :  Samuel  S.  Lewis,  John 
Henshaw,  Elisha  Parks,  Francis  S.  Carruth,  Otis  Rich,  Wm.  Freeman,  Hall  J.  How.  Oliver 
Fletcher  and  Adams  Bailey.  Said  United  States  is  Plaintiff  in  each  of  said  suits,  and  the  writs  in 
each  of  them  bear  date  January  3ffth,  1838,  and  i?  returnable,  to  the  U.  States  District  Court,  next 
to"  be  hoklen  at  said  Boston,  within  and  for  the  District  of  Massachusetts,  on  the  third  Tuesday 
of  iVfarch  next.  The  balance  of  said  promissory  paper,  and  all  collections  which  may  be  made 
thereon,  remaining  after  payment  of  such  amounts  as  may  be  .received  as  aforesaid  in  said  suits 
against  said  several  persons,  any  of  ei'ther  of  them,  or  after  a  decision  in  their  favor  in  said  suits, 
sliall  be  returned  to  said  Samuel  S.  Lewis  and  David  Henshaw,  the  survivor  of  them,  their  or  his 
order. 

(Signed,)        JONAS  L.  SIBLEY,  U.  S.  Marshal. 

Boston,  May  19,  1838. 
JONAS  L.  SIBLEY,  Marshal,  &c. 

SIR, — Please  deliver  to  John  Pickering,  Esq.,  Trustee  of  the  Warren  Association,  the  above 
mentioned  promissory  notes  against  said  Association. 

rSigned.)        JOHN  MILLS,  by 
E.  SMITH,  JUN. 

Boston,  May  19,   1838. 

Received  of  Jonas  L.  Sibley,  Marshal,  the  aforementioned  notes,  for  the  Warren  Association. 

(Signed,)        JOHN  PICKERING,  Trustee. 


Marshal's  Office,  Boston,  Sept.  14,  1838. 

The  memorandum  checks,  against  the  New  England  Glass  Company,  mentioned  in  the  schedule, 
it  was  ascertained,  after  they  came  into  iny  hands,  were  of  no  value,  and  they  were  taken  back  by 
Messrs.  Henshaw  and  Lewis,  and  a  judgment  against  said  N.  E.  Glass  Company,  for  §36,970  12, 
tots  assigned  to  me  in  lieu  thereof.  A  copy  of  said  assignments  is  hereunto  annexed. 

J.  L.  SIBLEY,  Marshal. 


47 
E. 

^...ges  of  William  Wri^c. 

Boston,  August  3,  1838. 

SIR, — Upon  the  first  intimation  that  measures  were  taking  to  compromise  the  demand  which  the 
United  States  held  against  the  Warren  Association,  I  addressed  a  letter  to  Mr.  Everett,  then  at 
Washington,  and  another,  I  think,  to  Mr.  Woodbury,  expressing  my  apprehension  that  such  com 
promise  would  end  in  an  imposition  upon  government,  and  a  reproach  upon  the  administration. 
In  Mr.  Everett's  reply  I  had  assurances  that  no  manner  of  compromise  had  been  authorized  by  the 
Department  at  Washington,  which  led  me  to  believe  that  the  information  which  I  had  received 
was  without  foundation.  But  it  soon  proved  otherwise,  by  a  consummation  of  the  plan,  and  the 
abuses  apprehended  have  been  carried  into  effect  to  the  fullest  extent. 

It  seems  that  the  Commonwealth  Bank  had  transferred  to  the  United  States,  as  collateral  security, 
certain  notes  of  the  Warren  Association,  which  that  Association  were  desirous  of  paying  in  land 
But  as  agents  of  government  have  no  power  to  change  the  ordinary  mode  of  payment  by  voluntary 
agreement,  and  can  only  take  lands  of  delinquent  debtors  by  legal  process,  a  suit  was  resorted  to 
— not  however,  against  the  Association,  as  it  should  have  been,  but  against  the  Commonwealth 
Bank,  as  principal  debtor,  for  which  these  notes  were  held  as  security ;  and  the  suit  thus  com 
menced  was  instituted  with  an  apparent  understanding  at  the  time,  or  subsequently  made  between 
the  agents  of  government  and  the  Bank  and  the  Association,  that  certain  lands  should  be  conveyed 
from  the  Association  to  the  Bank,  to  be  liable  upon  judgment  and  execution,  and  to  be  taken  and  sel 
off,  by  appraisement,  to  the  United  States,  and  that  the  land  thus  to  be  conveyed,  was  to  be  valued 
by  certain  men  agreed  upon,  who  were  to  determine  the  quantity  which  should  be  received  in  con 
sideration  of  these  notes,  amounting,  principal  and  interest,  to  the  sum  of  $164,533  33. 

In  pursuance  of  this  understanding,  the  action  against  the  Bank  was  defaulted  on  the  17th  day  of 
May  last.  Execution  was  then  issued  and  levied  upon  the  lands  which  had  been  simultaneously 
conveyed  by  the  Association  to  the  Bank  for  that  purpose,  and  the  former  estimated  value  was 
then  repeated,  in  order  that  the  proceedings  might  appear  to  have  the  sanction  of  law.  The  notes 
were  then  given  up  to  the  Association,  and  the  same  lands  conveyed  by  deed  of  the  Bank,  to  the 
United  States,  which  was  executed  on  the  19th  day  of  the  same  month. 

By  this  extraordinary  procedure,  the  government  have  acquired  about  25  acres  of  unsaleable  and 
almost  useless  lands,  for  which  has  been  allowed  the  above  sum  of  $164,533  33,  affording  a  profi' 
to  the  Warren  Association,  of  something  like  one  hundred  and  forty  thousand  dollars  over  its  cost, 
although  bought  at  the  top  of  speculation,  some  three  or  four  years  ago,  at  a  price  far  above  its  real 
value  then  or  now.  Its  intrinsic  worth  at  this  time  can  hardly  be  more  than  ten  thousand  dollars, 
upon  any  reasonable  calculation  whatever. 

The  securities  given  up  in  consideration  of  these  lands,  so  far  a.s  responsibility  was  concerned, 
were  good,  and  might  be'  relied  upon  with  as  much  safety  as  though  the  same  were  against  the 
Corporation  of  Boston. 

It  seems,  by  every  circumstance  connected  with  this  transaction,  in  whatever  way  it  is  viewed 
that  the  public  interests  have  been  entirely  overlooked,  and  official  trusts  prostituted  for  the  benefit 
of  a  few 'unprincipled  and  undeserving  men,.. 

In  looking  at  the  legal  steps  pursued  in  this  case,  we  are  led  to  inquire  why  suit  was  not  com 
menced  directly  against  the  Association  upon  its  notes,  when  it  was  certain  that  a  judgment  thereor* 
would  not  only  subject  these  same  lands  to,  th,e  operations  of  the  law,  but  would  subject  also  th< 
personal  property,  and  even  the  personal  liberty  of  responsible  men ;  and  would  subject,  in  liki 
manner,  the  good  and  valuable  lands  of  the  Association,  as  well  a*  the  bad  and  worthless,  if  land: 
at  all  were  necessary  to  the  recovery  of  this  debt. 

The  reasons  for  omitting  this  course,  we  are  left  to  infer  from  circumstances.  Probably  there  way 
fear  that  the  government  would  recover  too  much.  The  anticipation  of  $140,000  profi.t  on  a 
bad  bargain  might  have  had  some  influence,  for  it  was  dearly  seen  that  no  necessity  could  exist 
for  levying  an  execution  against  the  members  of  this  Association,  upon  these  or  any  other  lands  • 
for  the  abundance  of  other  means  would  preclude  the  possibility  of  such  necessity. 

In  the  collection,  of  government  dues,  it  is  presumed  to  be  the  duty  of  agents  to  employ  against 
delinquent  debtors  the  best  remedies  which  the  laws  afford.  This  would  shut  out  all  discretion  K 
banter  with  the  adverse  party  in  manner  common  in  private  transactions.  If  this  view  is  right, 
how  could,  Mr.  Mills,  or  any  other  agent  of  the  government,  negotiate  and  bargain  with  the  Warren 
Association  to  give  up  their  notes  for  $164,533  33,  for  an  indefinite  quantity  of  land  to  be  conveyed 
to  the  Bank  ;  submitting  that  quantity  to  certain  men,  authorized  to  say  how  much  was  equivalent 
to  this  debt  ?  Why  were  lands  conveyed  tQ  the  Bank?  Why  not  to  the  United  States  direct  ?  What 
could  be  the  difference  in  the  end  ?  Could  this  temporary  possession  by  the  Bank,  holding  for  a  time 
barely  sufficient  for  the  mock  ceremony  of  a  second  valuation  by  the  same  men,  produce  a  different 
or  better  result?  Certainly  it  could  not;  for  although  these  appraisers  might  have  changed  their 
views  after  the  first  valuation,,  and  put  down  the  price  upon  th,e  secoA<t,  vet  ll  would  be  the  same 
thing  to  the  government,  for  the.  first  valuation  constituted  the  payment  of  the  notes,  which  of 
course  were  given  up,  and  that  amount  of  the  debt  of  the  Bank  was  cancelled. 

In  whatever  way  we  look  at  this  thing,  we  see  nothing  but  a  departure  from  duty  by  the  agents 
of  the  government  to  promote  the  interests  of  the  adverse  party.  The  whole  proceedings  from  be- 
ginning show  this.  fact.  The  round-about  course  of  suing  the  Bank — conveying  to  it  the  lands  of 
'.he  Association  to  be  levied  upon  and  appraised — was  wholly  unnecessary  for  any  other  purpose. 


It  clearly  was  a  device  to  accomplish  an  end  upon  some  plausible  ground  of  justification.  But  tne 
very  foundation  upon  which  such  justification  was  intended  to  be  established,  fails  them  ;  for  the 
laws  of  the  Commonwealth  recognize  no  such  procedure  as  an  appraisement  of  lands  taken  by 
execution  against  a  Bank,  as  in  individual  cases.  On  the  contrary,  they  expressly  provide  that 
creditors  may  buy  up  the  real  estate  of  banking  institutions  and  sell  the  same  at  public  auction  ; 
the  agents  of  government  therefore,  if  bound  to  employ  the  best  remedies,  were  bound  to  sell  and 
not  to  appraise, — and  the  appraisement  neither  time  can  have  any  justification  in  law,  for  it  was  all 
a  voluntary  matter,  wherein  the  best  remedies  have  been  entirely  abandoned. 

There  is  something  unnatural  in  the  selection  of  opposition  men  to  judge  in  a  matter  wherein 
the  United  States  is  a  part}',  particularly  as  the  opposition  men  constitute  the  responsible  portion 
of  the  other  side.  This  together  with  the  hurry — the  restive  and  uneasy  disposition  to  bring  this 
matter  to  an  end,  and  corroborating  circumstances  to  show  that  Messrs.  Mills,  Sibley,  or  whom 
these  agents  be,  had  combined  with  the  adverse  party  to  discharge  these  liabilities,  for  the  smallest 
consideration  practicable  with  any  hope  of  justification. 

Whether  Mr.  Mills  is  interested  in  the  lands  of  the  Association,  I  know  not ;  but  the  Marshal, 
Mr.  Sibley,  is,  and  is  one  of  the  trustees  of  the  company  to  receive  and  make  conveyances,  and  is 
party  to  the  deed  of  conveyance  of  these  very  lands. 

I  have  confined  these  remarks  to  circumstances  connected  with  the  management  of  one  branch 
only  of  the  affairs  of  the  Commonwealth  Bank.  But  there  is  another,  equally  fruitful,  in  view  of 
which  I  may  speak  another  day. 

The  effect  which  such  conduct  must  unavoidably  have  on  the  administration,  is  a  matter  of 
serious  concern,  and  ought  not  to  be  overlooked.  Transactions  like  these  can  never  be  concealed 
and  kept  out  of  sight— and  unless  the  executive  will  rid  the  administration  of  such  agents,  the 
democratic  party  must  go  down. 

Already  is  it  apprehended  that  the  history  of  this  transaction  will  be  distributed  through  Maine 
upon  the  eve  of  the  approaching  election  ;  if  so.  it  cannot  fail  to  produce  an  injurious  effect,  and 
may  perhaps  defeat  that  success  now  so  strongly  anticipated.  Nothing  is  more  evident  than  that 
the  existence  of  the  democratic  party  and  the  success  of  its  principles  depend  entirely  on  the 
character  of  the  national  officers  variously  scattered  over  the  country.  Vice  and  immorality  on  the 
part  of  such  officers  should  never  be  tolerated  for  a  day — should  be  regarded  in  all  cases  as  dis- 
qualification and  cause  of  prompt  removal.  But  this  branch  of  executive  duty  seems  to  be 
entirely  neglected,  so  far  at  least  as  applies  to  this  quarter  of  the  country.  As  evidence  of  this 
fact,  we  see  among  us  individuals  continuing  to  enjoy  the  executive  favor,  whose  principles  and 
morals  are  of  the  most  questionable  kind.  And  as  to  some  of  them,  they  are  implicated  in  offences 
which  are  criminal ;  and  punishable  by  confinement  at  hard  labor  in  the  state  penitentiary. 

These  things  the  President  is  supposed  to  know,  for  repeated  statements  and  complaints  have 
been  made  to  him  ;  still  he  tolerates  this  disgrace  upon  his  administration,  rather  than  apply  the 
proper  corrective,  which  no  one  else  can  do. 

By  this  indulgence,  the  party  suffers,  the  administration  suffers,  and  will  continue  to  suffer  to 
the  end  of  this  strange  and  unaccountable  forbearance. 

If  the  President  misconceives  the  true  state  of  things  here,  and  sees  not  the  necessity  of  purging 
the  ranks  of  the  office-holders  in  this  city,  in  preservation  of  his  own  official  character,  if  nothing 
more,  it  shows  a  want  of  faith  in  the  credibility  of  friends  who  have  endeavored  to  serve  both  him 
and  the  cause  by  faithfully  representing  the  truth.  But  it  is  always  in  his  power  to  ascertain  facts 
by  investigation  :  this  would  test  the  veracity  of  complainants  as  well  as  the  conduct  of  those  com- 
plained against.  But  even  this  has  never  been  attended  to  on  the  part  of  the  Executive. 

Some  of  these  remarks  perhaps  would  be  more  appropriately  addressed  to  the  President  than 
you.  But  they  are  naturally  Jfcsociated  with  the  main  object  of  this  communication,  which  is 
more  appropriately  addressed  to  you  as  the  officer  of  government  from  whom  the  immediate  agents 
in  this  transaction  are  supposed  to  have  received  their  instructions.  How  far  these  agents  may 
be  able  to  entrench  themselves  behind  such  instructions,  I  know  not.  It  is  probable,  however,  if 
any  authority  has  been  given,  it  is  rather  a.  permission  than  instruction,  given  under  a  misappre- 
hension of  the  case,  and  elicited  perhaps  for  a  corrupt  end,  by  incorrect  and  improper  statements. 
Such  a  course  is  in  perfect  keeping  with  the  characters  of  certain  persons  here,  who  have  con- 
troled  the  local  interests  of  the  government  in  this  quarter  for  years. 

Knowing  all  these  things,  I  cannot  believe  in  any  foreign  agency,  in  the  planning  of  this  stu- 
pendous cheat.  It  is  earnestly  hoped,  therefore,  for  the  cause  of  justice,  that  prompt  and  decided 
measures  will  be  taken  to  exonerate  others  from  imputation  by  a  discharge  from  the  government 
employ,  those  who  are  the  real  authors  of  it. 

With  much  respect,  your  obedient  servant, 

WILLIAM   WRIGHT. 

To  HON.  II.  D.  GIM-IN, 
Solicitor  of  the  Tnosury. 

V. 

William  Wright  to  Mr.  Gilpin. 

Boston,  August  15,  1838. 

SiR) — I  have  received  your  letter  of  the  10th  instant.  To  answer  the  enquiry  you  make,  whether 
my  communication  of  the  3d  was  intended  as  official.  I  have  to  say  it  was.  As  to  the  remarks  con- 


cerning  the  President,  I  have  only  to  say  that  I  regret  exceedingly  that  there  should  be  any  occasion  for 
them.    My  views  in  future  upon  the  same  subject  will  be  addressed  to  the  President  himself. 

I  am  glad  to  hear  that  you  intend  to  go  into  a  thorough  investigation  of  this  affair  of  the  land. 
But  I  do  not  understand,  whether  it  has  reference  to  the  dismissal  of  agents  for  improper  conduct, 
or  whether  only  to  redress  the  wrongs  done  the  United  States.  Perhaps  it  is  both.  But  in  pur- 
suing your  intention,  it  is  necessary  that  you  guard  against  committing  this  labor  to  wrong  hands, 
who  will  strive  to  whitewash  the  matter,  rather  than  investigate  it. 

Respectfully,  your  obedient  servant, 

WILLIAM  WRIGHT. 
HON.  H.  D.  GILPIN, 

Solicitor  of  the  Treasury. 

G,  page  11&2J. 

Reply  of  Mr.  Mills  to  the  charges  of  William  Wright. 

United  States'  District  Attorney's  Office,  Boston,  Sept.  15,  1838. 

SIR, — Your  letter  of  the  25th  August,  enclosing  an  extract  of  a  letter  from  Mr.  William  Wright, 
was  received  some  days  since.  The  letter  from  Mr.  Wright,  as  you  justly  observe,  censures 
so  strongly  the  officer  of  the  United  States,  as  to  call  for  a  full  explanation  and  reply  to  its 
allegations. 

Mr.  Wright  commences  his  letter  by  stating  that  the  notes  of  the  Warren  Association  were  trans- 
ferred to  the  United  States  by  the  Bank.  In  this  he  is  incorrect ;  the  notes  were  never  transferred 
to  the  United  States. 

He  complains  that  a  suit  was  brought  against  the  Bank  and  not  against  the  Association,  as  it 
ought  to  have  been.  It  may  possibly  be  a  satisfactory  answer  to  this  objection,  that  the  United 
States  had  no  claim  against  the  Association,  and  that  the  notes  referred  to  were  not  payable  for 
several  months. 

The  men  selected  as  appraisers,  says  Mr.  Wright,  were  to  determine  the  quantity  of  land  to  be 
conveyed  by  the  Association  to  the  Bank  in  consideration  of  these  notes,  and  were  then  to  go 
through  the  "mock  ceremony  of  a  second  valuation."  This  is  stated  as  a  fact,  not  an  inference. 
In  another  part  of  his  letter,  he  says  "the  first  valuation  constituted  the  payment  of  the  notes  ;" 
coupling  that  declaration  with  another,  equally  erroneous,  that  the  notes  were  then  given  up.  It 
is  to  be  regretted  that  any  man  in  this  community  should  make  a  charge  of  this  kind,  injurious  to 
the  character  of  the  agent  of  the  United  States,  if  not  of  the  appraisers,  and  which  is  destitute  of 
the  least  particle  of  truth. 

Had  Mr.  Wright  been  as  anxious  to  obtain  correct  information  on  this  subject  as  he  was  to  com- 
municate his  own  conjectures,  inferences  and  suspicions  to  the  Department,  he  could  have  learnt 
from  the  appraisers  that  they  made  but  one  appraisal  of  the  lands ;  that  they  knew  nothing  of  the 
valuation  made  at  the  time  of  the  conveyance  ;  and  that  that  valuation  therefore  could  not  have 
influenced  their  judgment.  I  could  have  assured  Mr.  Wright,  that  I  knew  nothing  of  the  valuation 
he  refers  to,  and  that  the  notes  were  not  given  up  till  the  completion  of  the  levy. 

The  next  specification  in  Mr.  Wright's  letter  is  that  the  securities  given  up  were  good,  and 
might  be  relied  on  with  as  much  safety  as  though  the  same  were  against  the  corporation  of  Boston. 
If  tins  allegation  is  true,  and  it  were  known  to  me  that  these  securities  were  of  the  value  he  has 
stated,  or  if  the  evidence  of  that  could  have  been  obtained  by  the  exercise  of  due  diligence,  I  agree 
that  so  far  as  respects  myself,  his  censure  is  justly  merited.  And  upon  this  point  I  do  not  wish  to 
rely  upon  the  strong  comparison  he  has  made,  but  will  suppose  he  only  intended  to  say  that  the 
securities  were  good,  and  that  they  would  at  that  time  have  passed  in  the  money-market,  in  this 
city,  with  the  endorsement  of  the  Commonwealth  Bank,  for  as  much  value  as  the  notes  of  any  well- 
known  responsible  individual,  with  the  same  endorsement  and  running  the  same  time.  Mr. 
Wright  states  no  facts  in  support  of  his  declaration,  and  I  shall  presume  that  he  has  no  particular 
information  on  this  subject  more  than  is  known  to  others.  When  the  Commonwealth  Bank  failed, 
the  Warren  Association  was  owing  that  institution  a  sum  not  varying  much  from  $250,000,  and 
for  which  the  Bank  had  no  security  except  notes  signed  by  the  Treasurer  of  the  Association.  I  feel 
confident  that  the  brokers  and  business  men  in  this  city  will  sustain  me  in  the  assertion  that  the 
anticipated  loss  upon  this  large  debt  had  more  effect  in  depressing  the  bills  of  the  Bank  than  all 
other  causes  combined.  Will  Mr.  Wright,  or  any  intelligent  man,  pretend  that  anything  occurred, 
between  the  failure  of  the  Bank  and  the  17th  of  May,  that  enhanced  the  value  of  those  notes  ?  The 
truth  is  the  reverse  of  this.  At  the  time  the  legislative  committee  made  their  investigation,  I  was 
of  opinion  that  the  associates  were  personally  responsible  for  the  notes.  But  facts  were  soon  after 
disclosed,  or  came  to  my  knowledge,  that  very  much  diminished  my  confidence  in  that  opinion.  As 
a  general  principle,  all  the  members  of  a  joint  stock  association  are  personally  responsible  for  the 
debts  of  the  company.  But  in  this  case  I  was  well  satified,  on  examination,  that  the  officers  of  the 
Association  were  prohibited  from  borrowing  money,  or  incurring  debts  beyond  the  sum  of  thirty 
thousand  dollars.  Such  restriction,  it  is  not  supposed,  would  avail  to  defeat  the  claim  of  a  creditor 
who  had  no  notice  of  it.  But  all  these  notes  were  taken  by  the  Commonwealth  Bank  with  full 
notice  that  the  Treasurer  of  the  Association  had  no  authority  to  contract  the  debt.  I  do  not  pretend 
that  a  recovery  against  the  associates  was  entirely  hopeless,  but  I  do  say  that  it  was  so  very  doubt- 
ful that  no  prudent  man,  standing  in  the  same  relation,  would  have  sought  his  remedy  by  a  law- 
suit if  he  could  receive  his  debt  in  lands  at  an  appraisal.  Aside  from  this,  there  were  many  argent 
7 


50 

considerations  in  favor  of  an  arrangement  by  which  that  large  claim  should  be  cancelled.  These 
notes  it  will  be  recollected  were  all  on  time,  and  some  of  them  had  more  than  a  year  to  run  :  the 
United  States  not  holding  them  could  not  sue  them  when  due,  nor  could  they  reach  them  by  a 
trustee  process,  as  they  were  negotiable  paper.  I  had  strong  fears  also  that  other  creditors  of  the 
Bank  would  enter  into  this  arrangement,  which  they  could  do  by  indemnifying  the  sureties  to  the 
amount  of  these  notes,  or  by  the  creditors  and  Association  assuming  the  risk  of  a  recovery  against 
the  sureties.  It  may  be  said  if  this  were  done  that  it  would  of  course  diminish  the  debts  of  the 
Bank  and  leave  the  balance  of  the  assets  for  the  other  creditors.  The  answer  to  this  is  that  the  Bank 
is  insolvent  probably  to  the  amount  of  one  hundred  and  fifty  thousand  dollars.  If,  therefore,  the 
United  States  should  fail  in  the  actions  against  the  sureties  on  the  bond  of  February  14,  1837,  and 
the  notes  of  the  Association  or  the  avails  of  these  notes  should  have  passed  into  the  hands  of  other 
creditors  of  the  Bank,  the  United  States  would,  unquestionably,  lose  some  considerable  portion  of 
their  debt.  I  was  from  the  first  very  anxious  to  get  possession  for  the  United  States  of  as  many 
securities  from  the  Bank  as  possible.  It  was  with  difficulty  I  prevailed  upon  the  officers  qf  the 
Bank  to  transfer  the  notes  of  Henshaw  and  others  to  secure  the  claim  standing  to  the  credit  of  the 
Treasurer  of  the  United  States,  and  which  first  came  into  my  hands  for  collection.  But  the  only 
way  in  which  I  could  obtain  an  absolute  lien  upon  the  notes  of  the  Warren  Association  was  by  the 
agreement  entered  into  on  the  llth  of  May.  By  effecting  this  arrangement,  these  securities  or  their 
proceeds  have  been  applied  upon  the  debt  of  the  Bank.  These  were  the  principal  reasons  that  led 
me  to  recommend  the  course  adopted.  The  matter  was  of  considerable  importance ;  it  was  not 
hastily  or  inconsiderately  decided,  but  received  a  careful  and  repeated  examination.  I  was  aware, 
at  the  time  I  gave  this  opinion,  of  the  state  of  feeling  in  regard  to  the  Bank  and  Association,  and 
had  a  presentiment  that  my  conduct  would  be  censured,  though  it  now  comes  from  a  quarter  not 
then  anticipated.  But  being  satisfied  that  under  all  the  circumstances  of  the  case  the  arrangement 
would  be  beneficial  to  the  United  States,  and  that  the  proceedings  to  carry  it  into  effect  were  legal, 
I  had  no  hesitation  in  advising  its  adoption. 

In  collecting  the  government  dues,  says  Mr.  Wright,  it  is  presumed  to  be  the  duty  of  agents  to 
employ  against  delinquent  debtors  the  best  remedy  which  the  laws  afford.  This  principle  is 
unquestionably  correct,  and  it  is  one  upon  which  I  profess  to  have  acted.  "  This  would  shut  out 
all  discretion  to  banter  with  the  adverse  party  in  manner  common  in  private  transactions."  If  by 
this,  Mr.  Wright  means  that  the  Attorney  of  the  United  States  has  nothing  more  to  do  than  to  com- 
mence an  action  and  give  his  attention  to  it  in  Court,  and  can  make  no  arrangement  common  in 
private  transactions,  to  render  the  judgment  productive,  his  views,  in  regard  to  the  extent  of  my 
official  duties,  are  very  different  from  my  own.  I  am  yet  to  learn  that  a  different  rule  is  prescribed 
in  a  case  in  which  the  United  States  are  parties,  than  would  be  were  an  individual  my  client.  In 
either  case,  if  the  interest  of  the  principal  required  that  an  arrangement  should  be  made  "with  the 
adverse  party,"  even  to  place  property  in  a  condition  that  it  could  be  legally  attached  or  levied 
upon  by  execution,  it  would  in  my  opinion  be  the  duty  of  the  Attorney  to  make  the  arrangement. 
Had  I  acted  upon  the  principle  that  I  was  shut  out  from  the  exercise  of  "  all  discretion  in  manner 
common  in  private  transactions,"  I  should  have  been  spared  much  labor  and  anxiety  in  this  busi- 
ness, and  should  probably  have  escaped  the  censure  of  Mr.  Wright,  and  reprehension  from  any 
other  quarter. 

Mr.  Wright  next  inquires  why  were  lands  conveyed  to  the  Bank?  Why  not  to  the  United 
States  direct  ?  The  reason  is  that  the  United  States  had  no  claim  against  the  Association,  and  if 
they  had,  there  was  no  authority  for  taking  a  conveyance.  They  had  an  execution  against  the 
Bank,  and  the  law  authorized  the  levy  of  it  upon  the  lands  of  the  Bank. 

On  this  point  Mr.  Wright  alleges  that  the  laws  of  this  District  recognize  no  such  procedure  as  an 
appraisement  of  lands  taken  by  execution  against  a  Bank. 

By  the  general  law  in  this  District,  on  taking  lauds  to  satisfy  executions  for  debt,  "  all  the  real 
estate  of  a  debtor  may  be  taken  in  execution  for  his  debt."  By  another  act,  many  years  subsequent 
to  this,  it  was  enacted  "  that  the  lands  of  any  Bank  may  be  taken  in  execution  and  sold  by  public 
auction."  This  act  does  not  in  terms  repeal  the  other,  and  it  cannot  be  siTpposed  that  it  was  the 
intention  of  the  Legislature  to  repeal  it  by  implication.  On  this  point  I  had  no  doubt ;  but  as  Mr. 
Wright's  statement  was  apparently  drawn  up  by  a  lawyer,  and  he  confidently  asserts  that  the 
appraisement  was  illegal,  I  submitted  the  question  to  several  gentlemen  of  the  profession ;  they 
were  all  of  opinion  that  the  first  statute  is  in  full  force,  and  that  the  lands  of  a  Bank  may  be  levied 
upon  or  sold  at  the  option  of  the  creditor.  Should  it  be  inquired  why  the  lands  were  not  sold  on  the 
execution,  the  answer  is  obvious :  the  Association  would  not  consent  to  make  the  conveyance,  nor 
the  Bank  to  receive  it,  on  those  terms.  It  is  well  known  that  when  "the  money  market  is  light," 
there  is  scarce  any  kind  of  property  on  which  the  loss  is  so  great  by  a  forced  sale,  as  lands,  espe- 
cially where  the  quantity  sold  is  large.  So  far  as  regards  the  Association,  the  lands  could  not  have 
been  sold  on  execution,  but  must  have  been  set  off  by  appraisement,  had  the  execution  been  against 
the  Association,  instead  of  the  Bank.  But  it  may  be  contended  that  if  the  arrangement  was  judi- 
cious as  between  the  Bank  and  the  Association,  it  was  not  for  the  interest  of  the  U.  States.  This  I 
think  can  be  easily  te.sted  by  supposing  there  was  no  law  authorizing  the  sale  on  execution  ;  that 
the  lands  previously  belonged  to  the  Bank,  and  had  been  attached  on  the  original  writ  in  favor  of 
the  United  States  ;  could  any  one  acquainted  with  the  circumstances,  doubt  for  a  moment,  as  to  the 
propriety  of  extending  this  execution  upon  the  lands  ?  And  if,  in  the  case  supposed,  no  doubt  could 
arise,  then  how  can  the  agent  be  censured  for  proposing  an  arrangement  by  which  the  lands  were 
to  be  placed  in  a  condition  that  they  might  be  disposed  of  in  the  same  manner  ? 

The  reasons  for  omitting  to  sue  the  Association  on  the  notes,  Mr.  Wright  says  may  be  inferred 


61 

from  circumstances ;  and  after  making  the  charitable  inference  that  there  was  fear  the  United 
States  would  recover  too  much,  he  proceeds  to  say  that  it  was  clearly  foreseen  no  necessity  could 
«xist  for  levying  an  execution  against  the  members  of  this  Association  upon  these  or  any  other  lands, 
It  is  readily  admitted  that  an  execution  to  the  amount  of  these  notes,  against  the  reputed  members 
of  this  Association,  might  be  collected  without  resorting  to  real  estate.  But  an  execution  against  the 
members  of  that  Association  would  be  considered  rather  more  valuable  than  notes  of  hand  on  time, 
signed  by  the  Treasurer  of  the  Association,  the  validity  of  which  were  contested  by  the  associates 
on  the  ground  that  the  Treasurer  had  no  authority  to  borrow  the  money,  and  that  this  was  well 
known  to  the  officers  of  the  Bank  when  they  made  the  loans.  So  that  though  it  might  be  "  clearly 
foreseen  "  that  an  execution  (if  obtained)  against  certain  individuals  would  be  available  in  money, 
yet  Mr.  Wright  is,  I  believe,  the  only  one  whose  vision  was  so  clear  as  not  to  see  that  there  were 
serious  if  not  insurmountable  obstacles  to  encounter  before  a  judgment  could  be  obtained  against 
the  associates. 

Mr.  Wright  next  complains  that  there  is  something  unnatural  in  selecting  opposition  men  to 
make  the  appraisal.  It  is  true  that  the  appraisers  are  Whigs,  and  I  intended  to  appoint  such.  In 
an  ordinary  transaction  of  this  kind,  I  should  pay  no  regard  to  the  political  character  of  the  men ; 
but  I  did  in  this  case,  and  I  will  assign  my  reasons  for  doing  so.  The  Commonwealth  Bank,  for 
many  years,  and  at  the  time  of  its  failure,  was  under  the  management  of  men  friendly  to  the 
administration.  The  Warren  Association  I  have  always  supposed  was  a  kindred  institution.  Mr. 
Hood,  the  Cashier  and  one  of  the  Directors  of  the  Bank,  was  Treasurer  of  the  Association,  and  one 
of  its  Trustees.  Mr.  How  was  President  of  the  Association,  a  Director,  and  he  was  also  a  man- 
aging Director  of  the  Bank.  But  nothing  shows  more  clearly  the  intimacy  of  the  two  institutions, 
than  the  fact  that  when  the  Bank  failed,  the  Association  was  its  debtor  for  more  than  $200,000,  for 
which  they  had  no  security.  Under  these  circumstances,  let  me  suppose  I  had  appointed  men  of  a 
different  political  character  than  Messrs.  Merrill,  Gurney  and  Binney,  and  that  they  had  appraised 
the  lands  at  the  same  value,  or  for  more  or  less,  would  no  complaint  have  been  made  ?  I  should 
have  met  with  no  difficulty  in  selecting  competent  appraisers  from  my  political  friends ;  but  they 
would,  in  all  probability,  have  been  the  acquaintance  of  some  one  or  more  individuals  deeply  inter- 
ested in  the  Bank  or  Association.  If  this  course  had  been  adopted,  I  am  inclined  to  think  it  would 
not  have  been  more  satisfactory  to  Mr.  Wright ;  but  if,  in  the  case  supposed,  -he  were  silent,  some 
one  might  possibly  be  found  in  the  ranks  of  the  opposition,  who  would  have  no  stronger  confidence 
in  the  honesty  of  Democratic  appraisers  than  he  has  in  the  Whig  gentlemen  I  selected. 

I  may,  indeed,  consider  it  fortunate  that  I  appointed  men  to  the  performance  of  this  duty  whose 
character  will  effectually  shield  them  from  any  imputation  of  dishonesty  that  Mr.  Wright  may  cast 
upon  them.  And  if  the  appraisers  escape  unscathed,  the  "overt  act"  could  not  have  been  com- 
mitted by  the  agents ;  for  however  anxious  they  may  have  been  to  perpetrate  the  fraud,  it  could 
be  consummated  only  by  the  intervention  and  perjury  of  the  appraisers. 

Mr.  Wright  informs  you  that  the  action  against  the  Bank  was  defaulted  on  the  17th  of  May ;  that 
execution  was  issued  and  levied  upon  the  lands  which  had  been  simultaneously  conveyed  by  the 
Association  to  the  Bank  for  that  purpose.  These  he  considers  "corroborating  circumstances  to 
show  that  Messrs.  Mills  and  Sibley  combined  with  the  adverse  party  to  discharge  these  liabilities 
for  the  smallest  consideration  practicable  with  any  hope  of  justification."  But  how  long  an  interval 
between  these  several  acts  would  Mr.  Wright  require,  to  prevent  the  inference  of  fraud  ?  Will  he 
say  the  lands  would  not  in  all  probability  have  been  attached  by  other  creditors  of  the  Bank,  as 
soon  as  it  was  known  that  the  conveyance  was  made  ?  If  we  had  paused  in  this  business  for  a 
week,  or  a  day,  in  order  that  Mr.  Wright  should  not  have  it  in  his  power  to  say  that  we  were  eager 
to  defraud  the  government,  and  in  this  interval  the  lands  had  been  lost  by  another  attachment,  is  it 
to  be  supposed  that  he  would  have  been  satisfied  ?  Or  does  he  claim  the  privilege  of  complaint 
whether  our  progress  is  slow  or  fast  ?  I  am  sorry  that  Mr.  Wright's  moral  sense  is  so  obtuse  that 
he  cannot  correctly  appreciate  the  motives  that  influenced  the  agents  in  transacting  this  business  ; 
and  he  perceives  no  evidence  of  a  desire  on  their  part  to  guard  and  protect  the  interests  of  the 
United  States,  but  a  restless  disposition  to  defraud  them  of  one  hundred  and  forty  thousand 
dollars. 

Mr.  Wright  does  not  know,  he  says,  whether  I  am  a  member  of  the  Warren  Association.  I  have 
good  reason  to  believe  that  he  does  know  that  I  am  not  and  never  was  a  member. 

Mr.  Wright  refers  to  a  deed  of  these  lands,  from  the  Bank  to  the  United  States,  executed  the  day 
after  the  levy.  When  Mr.  Adan  returned  the  agreement  executed  by  the  officers  of  the  Bank,  and 
the  sureties,  I  said  to  him,  that  the  title  to  lands  set  off  on  execution  was  often  defeated  by  some 
informality  on  the  part  of  the  appraisers,  or  of  the  officer  in  making  his  return  ;  and  to  guard  against 
such  an  occurrence,  I  should  request  him  to  obtain  a  deed  of  confirmation  from  the  Bank  to  the 
United  States.  I  left  the  city  on  the  morning  after  the  levy  was  completed.  The  deed  was  put  on 
record  in  my  absence.  I  never  saw  it,  and  my  conversation  with  Mr.  Adan  escaped  my  recollection, 
till  I  read  Mr.  Wright's  letter.  I  make  this  statement  as  an  apology  for  not  forwarding  you  the 
deed  or  a  copy  of  it  with  my  report. 

In  your  letter  enclosing  Mr.  Wright's,  you  express  regret  that  the  agreement  of  the  llth  of  May, 
1838,  was  filially  concluded  without  being  submitted  to  your  office.  That  agreement,  in  the  view  1 
take  iff  it,  is  not  materially  different  from  the  proposition  previously  submitted.  It  differs  materi- 
ally from  Mr.  Adan's  ;  bin  every  essential  alteration  was  supposed  to  be!  favorable  to  the  U.  States, 
and  that  is  the  reason  I  did  not  think  it  necessary  to  submit  it  to  your  revision.  Mr.  Adan's  propo- 
sitition  was,  to  take  judgment  for  about  8200,000.  I  insisted,  and  it  was  so  agreed,  that  judgment 
thould  be  rendered  for  the  full  amount  due  from  the  Bank.  And  I  will  here  observe,  that  one  con^ 


52 

sideration  which  led  me  to  propose  this  arrangement  was,  that  by  getting  judgment  against  the 
Bank,  the  plaintiffs  would  be  immediately  (or  as  soon  as  return  could  be  made  on  the  execution,) 
in  a  condition  to  commence  proceedings  in  chancery.  If  the  arrangement  had  not  been  made, 
the  defendants,  in  all  probability,  would  have  carried  the  case  into  the  Circuit  Court,  and  judgment 
would  have  been  delayed  till  May  next. 

Another  of  Mr.  Adan's  propositions  was,  that  the  lands  attached  should  be  levied  upon  as  well 
as  those  proposed  to  be  conveyed  to  the  Bank.  This  was  rejected.  It  was  further  proposed,  as 
stated  in  Mr.  Adan's  letter,  that  "  the  quantity  of  land  to  be  conveyed  by  said  Association  to  pay 
said  one  hundred  and  sixty  thousand  dollars,  to  be  determined  by  the  same  three  appraisers  who 
shall  under  oath  appraise  the  same  in  said  levy.  This  I  objected  to  as  improper,  and  it  was 
omitted  in  the  agreement. 

The  sureties  were  not  considered  necessary  parties  to  the  agreement  and  they  subscribed  it  to 
prevent  any  question  being  made  that  their  rights  were  injuriously  affected.  It  appears  to  me 
that  it  was  immaterial  to  the  sureties  whether  the  application  of  the  amount  of  the  notes  was  made 
before  or  after  their  liability  was  ascertained.  If  they  are  held  for  all  sums  deposited  by  the  United 
States  in  the  Bank,  they  will  receive  the  benefit  of  these  notes  ;  and  if  they  are  discharged,  the  pre- 
vious application  can  in  no  way  be  prejudicial  to  them. 

In  making  and  carrying  this  agreement  into  effect,  I  certainly  did  suppose  that  I  was  acting 
with  your  approbation.  If,  after  the  full  statement  I  have  now  made,  you  should  be  of  opinion  that 
I  have  pursued  a  course  at  variance  with  the  spirit  if  not  terms  of  your  letters  of  the  6th  of  March, 
9th  of  April,  and  4th  of  May,  I  shall,  in  my  own  justification,  wish  to  give  the  reasons  why  I  sup- 
posed I  was  acting  with  your  sanction,  and  to  request  that  the  papers  may  be  placed  on  the 
files  of  your  office. 

By  referring  me,  in  your  letter  of  the  9th  of  April,  to  the  8th  and  9th  sections  of  the  act  of  20th 
April,  1818,  I  did  not  consider  it  as  a  direction  to  institute  a  garnishee  process  against  the  War- 
ren Association,  under  that  statute,  but  that  it  was  left  to  my  discretion  to  do  it,  if,  under  the  cir- 
cumstances, such  process  could  be  sustained.  The  notes  given  by  the  Treasurer  of  the  Association 
were  negotiable,  and  they  had  been  actually  transferred  by  endorsement.  It  appeared  to  me  that 
the  process  could  not  be  sustained.  In  regard  to  the  chancery  process,  could  I  have  filed  a  bill 
sooner  than  I  did?  Is  it  not  a  general  rule  that  there  must  be  a  recovery  against  the  debtor  and 
a  return  of  Nulla  Bona  on  the  execution  before  you  can  proceed  in  chancery  ?  I  had  supposed  that 
the  complainant  is  in  all  cases  bound  to  show  that  he  sued  out  execution  and  pursued  it  to  every 
possible  extent  before  he  files  his  bill. 

In  this  case,  immediately  on  the  return  of  the  execution,  I  filed  a  bill  against  the  Bank,  making 
several  of  its  debtors  parties  to  it. 

At  the  time  the  writs  were  served  on  the  sureties  to  the  bond  of  the  14th  February,  1837,  it  was 
supposed  that  the  security  then  taken  by  the  Marshal  was  the  best  that  could  be  obtained.  I  may 
be  mistaken,  but  I  am  still  of  that  opinion.  Had  the  notes  of  the  Association  gone  back  to  iho 
Bank,  they  would  form  a  valuable  part  of  its  assets ;  but  it  is  doubtful  into  whose  hands  those 
assets  would  have  fallen.  The  United  States  might,  to  that  amount,  have  changed  positions  with 
some  creditors  of  the  Bank  who  will  now  get  nothing. 

You  do  me  the  justice  to  say  that  you  doubt  not  the  course  I  adopted,  in  relation  to  the  notes  of 
the  Warren  Association  was,  in  my  opinion,  best  for  the  interests  of  the  United  States.  I  think  I 
am  able  to  show  that  I  have  used  reasonable  care  and  professional  skill  in  managing  the  business 
with  which  I  have  been  entrusted. 

I  am,  sir,  very  respectfully,  your  obedient  servant, 

JOHN   MILLS, 
District  Attorney. 

To  the  Solicitor  of  the  Treasury. 

H. 

Mr.  Choate's  opinion  upon  the  settlement. 

Boston,  November  22,  1838. 

SIR, — I  should  have  answered  your  letter  before,  but  some  of  the  inquiries  which  it  made 
necessary  were  of  a  kind  so  little  professional,  and  obliged  me  to  collect  the  judgments  of  so  many 
different  persons  on  matters  with  which  I  was  not  very  familiar,  that  I  have  but  just  prepared  my- 
self to  communicate  any  opinion  upon  the  several  questions  stated  by  you.  I  have  not  felt  myself 
at  liberty  to  avail  myself  of  any  considerable  assistance  from  Mr.  Mills,  and  this  circumstance, 
also,  has  increased  the  difficulty  in  the  way  of  an  early  reply. 

The  result  to  which  I  have  arrived  is,  that  the  arrangement  effected  by  Mr.  Mills,  was,  under 
the  embarrassing  circumstances  of  the  case,  a  judicious  arrangement  for  the  government,  entered 
into  in  the  purest  official  good  faith,  in  the  exercise  of  a  sound  discretion.  I  consider  the  question, 
in  the  first  place,  whether  the  Commonwealth  Bank  could  enforce  the  notes  signed  by  the  Treasurer 
of  the  Warren  Association,  as  attended  with  great  difficulty.  The  highest  professional  opinions 
were  divided  upon  it.  The  agents  of  the  Association,  who  executed  and  delivered  the  notes  to  the 
Bank,  exceeded  their  authority  m  that  act,  and  the  agents  of  the  Bank,  who  received  the  notes  and 
made  the  advances  on  them,  were  perfectly  conusant  of  this  excess  of  authority  of  the  agents  of  the 
Association.  They  were  so,  because  they  were  themselves  officers  in  the  Association  'and  in  the 
Bank. 

The  stockholders  in  the  Association  had  determined  to  contest  their  liability,  and  would  have 


53 

been  charged,  if  at  all,  at  the  end  of  a  very  long  and  expensive  litigation.  The  sureties  of  the 
Commonwealth  Bank,  who  received  these  notes  from  the  Bank,  stood  upon  no  higher  equity  than 
the  party  from  whom  they  received  them,  and  would  have  had  the  same  difficulty  precisely  in 
enforcing  them  against  the  Association. 

But  whatever  may  have  been  the  chances  of  recovering  on  these  notes  in  the  hands  of  the  Bank, 
or  its  sureties,  the  United  States  could  do  nothing  with  them,  until  they  should  first  recover  a 
judgment  against  the  sureties.  The  Marshal  held  the  notes  only  as  a  collateral  security  by  special 
deposit,  for  such  contingent  judgment.  Whether  such  will  ever  be  recovered,  and  to  what  extent 
it  will  ever  be  recovered,  are  great  questions,  now  actually  under  litigation  in  the  District  Court.  I 
am  about  putting  in  replications  to  the  pleas  of  the  sureties,  and  I  should  not  wish  to  express  any 
opinion  as  to  the  result,  but  I  will  venture  to  say  that  the  District  Attorney  conducted  with  much 
discretion  in  procuring  for  the  government  an  absolute  title  to  land,  in  lieu  of  notes  which  were  to 
be  wholly  unavailing  until  judgment  should  be  recovered  against  the  sureties,  and  then  only  to  the 
extent  of  such  judgment. 

With  regard  to  the  details  of  the  manner  in  which  the  title  was  passed  to  the  United  States,  it 
would,  of  course,  have  been  preferable  (if  it  had  been  practicable)  to  have  seized  and  sold  the  land, 
and  applied  the  actual  net  proceeds  only  to^the  execution.  But  this  was  impracticable.  Against 
the  Warren  Association  the  United  States  had  no  judgment,  and  never  could  have  any,  until  after 
it  should  recover  one  against  the  sureties  of  the  Commonwealth  Bank.  It  was  part  of  that  arrange- 
ment, that  the  land,  when  conveyed  to  the.  Bank,  should  be  taken  under  an  appraisement,  and  the 
United  States  could  get  it  in  no  other  way.  The  question  resolves  itself  into  this :  Was  it  expe- 
dient to  accept  the  land  at  all  ?  For  if  it  were,  (as  I  think  it  was,)  it  could  only  be  had  as  it  was 
had.  The  proceedings  upon  the  levy  were  legal,  and  the  title  of  the  United  States  was  perfect, 
that  is  to  say,  it  has  the  entire  title  of  the  Association.  I  take  it  for  granted  that  title  was  good,  but 
have  not  investigated  it. 

Upon  a  levy  of  execution  against  a  corporation,  I  think  the  judgment  creditor  has  an  option  to 
sell,  or  to  take  under  the  valuation.  In  this  instance,  as  I  have  stated,  the  judgment  creditor 
could  proceed  but  in  one  way. 

I  do  not  well  see  how  more,  or  more  judicious  pains  could  have  been  taken  in  the  selection  of 
appraisers,  and  I  do  not  see  any  shadow  of  hope  that  the  appraisement  could  be  vacated  for  fraud 
or  irregularity. 

The  District  Attorney  really  selected  two  out  of  three.  The  men  were  unexceptionable,  and  all 
suspicion  of  fraud,  or  undue  influence,  is  excluded  by  the  circumstances. 

There  is,  indeed,  a  universal,  unconscious  and  irresistible  inclination  in  jurors  and  appraisers  in 
favor  of  a  party  litigating  with  the  United  States,  and  it  is  not  impossible  that  this  may  have 
affected  the  appraisement  in  this  case,  but  I  see  no  ground  for  setting  aside  the  proceedings. 

My  inquiries  as  to  the  justness  of  the  valuation  have  not  been  entirely  satisfactory. 

Certainly,  in  the  present  state  of  the  money  market,  and  of  the  public  temper  in  relation  to  mat- 
ters of  speculation,  the  appraisement  is  high.  The  government  must  hold  the  land  a  long  time,  I 
think,  before  it  can  realize  the  amount  of  the  appraisement. 

I  am  free  to  say,  however,  that  I  think  it  may,  ultimately,  become  productive  and  valuable. 

Very  respectfully,  yours, 

To  H.  D.  GILPUV,  ESQ.,  (Signed,)          RUFUS  CHOATE. 

Solicitor  of  the  Treasury  of  the  United  States. 

I. 

Mr.  Gilpin's  report  to  Congress. 

Treasury  Department,  January  26,  1839. 

SIR, — In  compliance  with  the  following  resolution,  adopted  by  the  House  of  Representatives  on 
the  14th  instant,  viz. : 

"  Resolved,  That  the  Secretary  of  the  Treasury  be  directed  to  inform  this  House  what  is  the 
present  amount  of  indebtedness  to  the  United  States  (if  any)  of  the  Commonwealth,  Franklin,  and 
Lafayette  Banks,  severally  and  respectively,  in  the  city  of  Boston,  in  the  State  of  Massachusetts  ; 
and  in  what  manner,  and  to  what  extent,  the  debt  due  from  each  of  said  Banks  is  secured  ;  and  it' 
the  debts  of  said  Banks,  heretofore  reported  to  Congress,  have  been  paid,  at  what  time  and  in  what 
manner  the  payments  were  made  ;  and  whether  the  debt,  heretofore  reported  to  be  due  from  John 
K.  Simpson,  late  Pension  Agent  in  the  city  of  Boston,  has  been  paid  or  secured  to  the  United 
States  ;  and  if  paid,  how,  or  when  ;  or  if  secured  to  be  paid,  by  what  suretyship  of  persons  or 
assurance  of  property ;  and  what  measures  have  been  taken,  on  behalf  of  the  United  States,  to 
obtain  security,  or  payment  of  any  amount  which  may  be  due  from  said  Commonwealth,  Franklin, 
and  Lafayette  Banks,  and  the  estate  and  sureties  of  the  said  John  K.  Simpson,  respectively, "- 

I  have  the  honor  to  submit  the  annexed  report  from  the  Solicitor  of  the  Treasury.  It  is  believed 
to  contain  all  the  information  desired,  except  the  additional  remark  may  be  proper  that  the 
Lafayette  Bank  has  never  been  a  deposit  Bank,  nor  is  it  known  ever  to  have  .been  in  any  way 
indebted  to  the  United  States. 

Respectfully, 

LEVI  WOODBURY, 

HOK.  JAMES  K.  POLK,  Secretary  of  the  Treasury. 

Speaker  of  the  House  of  Represent ative$. 


54 

Office  of  the  Solicitor  of  the  Trtasury,  January  25,  1839. 

SIR, — I  had  the  honor  to  receive  the  resolution  of  the  House  of  Representatives  of  the  14th 
instant,  referred  by  you  to  this  office,  and  requesting  information  as  to  the  legal  proceedings  insti- 
tuted for  the  recovery  of  the  debts  due  to  the  United  States  from  the  Commonwealth,  Franklin, 
and  Lafayette  Banks,  at  Boston  ;  and  from  John  K.  Simpson,  late  Pension  Agent  at  that  place. 

On  the  18th  January,  1838,  an  account  was  transmitted  to  this  office  by  the  First  Comptroller  of 
the  Treasury,  stating  that  there  was  •'•'  a  balance  of  public  money  remaining  deposited  in  the 
Commonwealth  Bank,  on  the  8th  January,  1838,  and  due  to  the  United  States,  of  $51,749  90." 
This  account  was  transmitted  immediately  to  the  District  Attorney  at  Boston,  with  instructions  to 
commence  suit  for  the  recovery  of  the  balance  stated  against  the  Bank  and  its  sureties  in  the  bond 
dated  14th  February,  1837,  and  taken  under  the  provisions  of  the  deposit  act  of  23d  June,  1836 ; 
the  penalty  of  which  was  for  £500,000,  and  of  which  a  certified  copy  was  transmitted.  This  was 
accordingly  done.  As  it  appeared  that  the  bond  had  never  been  duly  executed  by  the  Bank,  under 
its  corporate  seal,  and  as  the  sureties  also  contended  that  an  action  could  not  be  sustained  against 
them,  because  the  balance  of  public  money  now  stated  to  be  due,  and  sought  to  be  recovered,  had 
all  been  deposited  since  the  Bank  ceased  to  be  a  deposit  bank  under  the  provisions  of  the  above 
law,  the  District  Attorney  deemed  it  advisable,  in  addition  to  the  above,  to  institute  a  separate 
action  of  assumpsit  against  the  Bank  itself.  He  did  so,  accordingly,  on  the  22d  of  January,  and 
he  obtained  from  the  Bank,  notes  of  its  debtors,  considered  by  him  adequate  collateral  security  for 
the  payment  of  the  whole  slated  balance. 

On  the  24th  January,  the  Secretary  of  the  Treasury  informed  this  office  that,  in  addition  to  the 
balance  reported  on  the  18th  as  due,  there  were  considerable  sums  of  public  money  placed  there 
by  collecting  and  disbursing  officers,  and  still  remaining  on  deposit  in  the  Bank,  which  were 
included  among  its  liabilities  to  the  United  States,  and  for  which  the  sureties  in  the  official  bond 
were  considered  by  the  Treasury  Department  to  be  liable,  as  well  as  the  officers,  personally,  who 
made  the  deposits.  Instructions  were  immediately  given  to  the  District  Attorney  to  this  effect. 
On  examining  the  books  of  the  Bank,  he  ascertained  the  following  balances  of  deposits  by  col- 
lecting and  disbursing  officers : 

Pension  Department, $152,684  21 

Post  Office  Department, 7,806  99 

D.  S.  Townsend,  Paymaster, <     .  1,167  32 

David  Hecshaw,  Collector,       65,941  77 

H  K.  Craig,  Master  of  Ordnance, 534 

Shaw,  Lewis  and  How,  Commissioners  new  Custom-House, 71,555  38 


Making,  together,        $299,161  01 

Adding  to  this  the  above-stated   balance,  due   to  the   Treasurer  of  the  United 

States,  of 51,749  90 


Would  make  an  aggregate  of  .     ;     .     »     :....; 350,910  91 

The  Treasurer's  balance,  however,  was  reduced,  before  suit  was  instituted,  by  a 

payment  of 12,11297 


Leaving  the  aggregate  of  public  money  on  deposit, $338,797  94 


On  the  30th  January,  separate  suits  were  accordingly  commenced  by  the  District  Attorney  for  the 
recovery  of  this  sum,  against  Hall  J.  How,  Otis  Rich,  John  Henshaw,  Elisha  Parks,  F.  S.  Carruth, 
William  Freeman.  Oliver  Fletcher,  and  Adams  Bailey,  the  sureties  of  the  Bank  in  its  bond  of  14th 
February,  1837;  the  damages  in  each  case  being  stated  at  $  100,000,  and  the  Marshal  being 
directed  to  attach  sufficient  property. 

Suits  were  also  commenced  against  Hall  J.  How  and  Charles  Hood,  the  sureties  of  John  K. 
Simpson  in  his  bond  of  30th  January,  1834  ;  and  against  Otis  Rich  and  John  Henshaw,  sureties  of 
Simpson  in  his  bond  of  12th  February,  1836,  to  recover  from  them  the  portion  of  the  above  amount 
which  was  due  under  his  pension  asfe'rtcy ;  and  at  the  same  time  the  proper  steps  were  taken  to 
secure  the  priority  of  the  United  States  in  the  distribution  of  the  assets  of  his  estate,  he  having  died 
insolvent. 

On  the  process  being  served  by  the  Marshal,  on  the  2d  February,  against  the  sureties  of  the  Bank, 
they  placed  in  his  hands  securities  to  the  nominal  amount  of  $280X)00.  These  consisted  of  pro- 
missory notes  due  to  the  Bank  by  its  debtors,  which  had  been  transferred  to  the  sureties  previous  to 
the  institution  of  the  suits,  and  formed  the  most  valuable,  if  not  the  only  available  portion  of  the 
property  of  the  Bank  at  the  time  of  its  failure.  They  were  placed  in  the  Marshal's  hands  condi- 
tionally, to  rtbide  the  result  of  the  suits  against  the  sureties  on  the  bond.  These  sureties,  however, 
contested  and  totally  denied  their  liability  to  the  United  States  under  this  bond,  on  the  grounds,  as 
was  understood,  that  the  bond  was  never  duly  executed,  not  having  been  sealed  with  the  seal  of 
the  Bank  ;  that,  by  the  terms  of  the  bond  and  of  the  contract  made  with  the  Bank  by  the  Secretary 
of  the  Treasury,  pursuant  to  the  provisions  of  the  deposit  act  of  1836,  the  sureties  were  only  bound 
for  the  security  of  the  public  moneys  belonging  to  the  United  Slates,  deposited  to  the  credit  of  the 
Treasurer,  and  not  for  deposits  made  by  disbursing  officers  in  their  own  names,  of  which  nearly 
the  whole  of  what  they  were  now  sued  for  consisted  ;  that,  even  of  these  deposits,  the  principal 


55 

portion  had  been  made  since  the  Bank  ceased  to  be  legally  a  deposit  Bank,  and  therefore  at  a  period 
•when  the  legal  liability  of  the  sureties,  had  it  previously  existed,  was  at  an  end ;  and  that,  so  far  as 
regarded  the  small  sum  which  did  remain  to  the  credit  of  the  Treasurer,  the  whole  of  that  had  been 
received  by  the  Bank  subsequent  to  that  event.  On  these  grounds  principally,  and  upon  some 
others,  the  sureties  have  resisted  the  claim  of  the  United  States  against  them ;  and  the  suits  are 
now  pending  in  the  District  Court  of  the  United  States  at  Boston. 

Among  the  two  hundred  and  eighty  thousand  dollars  of  securities,  above  referred  to  as  handed 
over  conditionally  by  the  sureties  to  the  Marshal,  to  await  the  event  of  these  suits,  were  six  promis- 
sory notes  signed  by  Charles  Hood,  as  Treasurer,  on  behalf  of  the  Warren  Association,  amounting, 
altogether,  to  $160,000,  and  payable  in  four,  five,  seven,  nine,  eleven,  and  thirteen  months.  The 
Directors  and  associates  of  the  Warren  Association,  however,  denied  their  liability  for  these  notes, 
on  the  ground  that  they  were  signed  by  the  above-named  officer  in  violation  of  an  existing  and 
positive  prohibition,  which  expressly  forbid  any  officer  to  borrow  money,  or  incur  debts  beyond  the 
amount  of  $30,000,  without  a  resolution  to  that  effect ;  and  that  the  existence  of  this  prohibition  was 
known  to  the  Commonwealth  Bank  at  the  time  the  loan  was  made  upon  these  notes.  The  residue 
of  the  notes  conditionally  handed  to  the  Marshal,  and  amounting  to  somewhat  more  than  one  hun- 
dred thousand  dollars,  were  considered,  in  general,  to  be  good.  As  several  of  the  sureties,  who 
were  parties  to  the  bond,  had  failed,  and  as  real  estate  (except  about  $10,000)  was  the  only  property 
of  the  solvent  sureties  that  could  be  attached,  the  District  Attorney  considered  this  transfer,  condi- 
tional as  it  was,  of  these  promissory  notes,  to  be  for  the  interest  of  the  United  States,  as  it  unques- 
tionably was.  The  sureties,  however,  refused  to  surrender  them,  or  allow  the  Marshal  to  hold 
them  to  respond  to  any  judgment  against  the  Bank  itself,  but  such  only  as  might  be  recovered  on 
the  suits  instituted  against  themselves,  and  in  which  they  contested  their  liability. 

On  the  9th  February,  1838,  a  duly  certified  copy  of  the  contract  entered  into  by  the  Bank  on  the 
15th  July,  1836,  and  which,  being  duly  executed,  was  not  liable  to  the  objection  taken  to  the  bond, 
was  transmitted  to  the  District  Attorney,  with  copies  of  the  several  bonds,  to  be  used  in  further  pro- 
ceedings against  the  Bank,  should  he  deem  it  advisable.  On  receiving  the  contract,  the  District 
Attorney  commenced  suit  upon  it  against  the  Bank,  and  under  it  the  sheriff  attached  all  the  lands 
•  MO;  to  the  Bank  that  he  could  find.  They  were  not  of  much  value,  but  the  District  Attorney 
is  of  opinion  that  at  least  $20,000  of  the  debt  due  to  the  United  States  will  be  realized  out  of  this 
suit. 

On  the  17th  May,  1838,  during  the  March  term  of  the  District  Court  of  the  United  States,  and 
pursuant  to  an  agreement  made  the  llth  May,  a  judgment  was  confessed  by  the  Bank,  in  the  action 
of  assumpsit,  and  duly  entered  of  record  in  favor  of  the  United  States,  for  $325,517  55.  The  whole 
debt  at  that  time  amounted  to  $345,517  55,  but  the  balance  of  $20,000  being  considered  by  the  Dis- 
trict Attorney  as  secure  under  the  suit  brought  on  the  23d  February,  judgment  for  it  was  left  to 
await  the  termination  of  that  action.  On  this  judgment  for  $325,517  55  execution  was  issued  to 
the  Marshal  on  the  same  day. 

At  the  time  that  the  Bank  thus  agreed  to  confess  this  judgment  for  the  whole  amount  of  the  pub- 
lic moneys  on  deposit,  there  was  no  property,  real  or  personal,  belonging  to  that  institution,  and 
known  to  the  District  Attorney  or  the  Marshal,  which  could  be  levied  upon;  the  sureties,  and  the 
sums  ihat  might  be  ultimately  realized  out  of  the  promissory  notes  and  securities  held  conditionally 
by  the  latter  officer,  constituted  the  only  source  from  which  payment  was  to  be  expected.  A  pro- 
position, however,  had  been  made  by  the  Bank  and  the  sureties,  for  the  unconditional  substitution 
of  real  estate  for  that  portion  of  the  conditional  securities  which  consisted  of  the  notes  of  the  War- 
ren Association,  provided  the  United  States  would  proceed  under  its  execution  by  way  of  extent  of 
the  real  estate,  and  not  by  a  Marshal's  sale.  The  law  of  Massachusetts  gives  an  option,  as  to 
cither  of  these  modes,  to  a  judgment  creditor  against  a  Bank  or  corporation,  while  against  private 
debtors  it  obliges  him  to  take  the  real  estate  by  extent,  at  a  valuation  and  appraisement  made 
according  to  law  ;  and  it  was  contended  by  the  Directors  and  associates  of  the  Warren  Association, 
that  even  if  they  could  be  held  personally  answerable  for  these  notes,  (which  was  denied,  and 
would  be  contested  if  suit  was  brought  on  them,)  yet,  in  case  of  eventual  recovery,  their  real  estate 
must  be  taken  by  an  extent  similar  to  that  which  they  required  the  United  States  to  adopt,  in  case 
it  should  be  voluntarily  conveyed  to  the  Commonwealth  Bank,  and  made  liable  to  its  debts.  It 
was  agreed,  on  the  part  of  the  United  States,  to  pursue  this  mode  under  its  execution,  provided  the 
Warren  Association  would  convey  absolutely  to  the  Commonwealth  Bank,  and  thus  render  liable 
to  the  execution,  an  amount  of  real  estate  sufficient  to  cover  the  whole  principal  and  interest  of  its 
notes  held  conditionally  by  the  Marshal  ;  that  the  Register  of  Deeds  should  certify,  in  writing,  that 
the  title  of  the  lands  so  conveyed  was  good ;  and  that  two  of  the  three  appraisers  required  by  law 
should  be  named  by  the  District  Attorney. 

Under  the  execution  in  the  hands  of  the  Marshal,  therefore,  Nathan  Gurney  and  James  C.  Merrill 
were  appointed  appraisers  on  the  part  of  the  United  States,  and  Amos  Binney  on  the  part  of  the  Bank 
• — all  considered  to  be  persons  well  qualified  to  make  the  appraisement  and  valuation.  Real  estate, 
to  the  amount  of  $16(5,437  90,  consisting  of  sundiy  squares  and  lots  in  South  Boston,  and  estimated, 
it  is  understood,  at  the  value  of  fifteen  cents  a  foot,  was  extended  and  delivered  to  the  United 
States,  under  this  process.  To  confirm  the  title  of  the  United  Stales  more  effectually,  if  necessary, 
a  deed  was  also  executed  by  the  Bank  on  the  18th  of  May,  1838. 

On  the  31st  of  July,  1838,  the  District  Attorney  collected  out  of  the  securities  placed  in  his  hands 
by  the  Bank  in  January  preceding,  a  further  sum  of  $2,595  68,  together  with  the  costs  that  had  ac- 
crued. This  was  paid  by  him  to  the  Marshal,  and  by  that  officer  paid  into  the  Treasury. 

On  the  :;lst  July,  the  District  Attorney  filed  a  bill  in  equity  against  sundiy  debtors  of  the  Bank, 


with  a  view  to  obtain  such  further  security  from  that  source  as  might  be  available  towards  the  debt 
due  to  the  United  States. 

On  the  9th  November,  1838.  the  District  Attorney  collected  from  the  securities  above  referred  to  a 
further  sum  of  816,255  71,  together  with  costs.  This  was  paid  over  to  the  Treasurer  of  the  United 
States,  and  duly  covered  by  warrant  on  the  22d  November,  1838. 

It  will  thus  be  seen  that  of  the  original  amount  due  from  the  Bank  to  the  United 

States,  of §350.910  91 

Payments  have  been  made  into  the  Treasury  to  the  amount  of    ...    $30,964  36 

And  real  estate  has  been  set  off,  by  extent,  to  an  amount  of 166,437  90 

197.402  26 


Thus  leaving  due,  exclusive  of  interest, $153,508  65 


It  may  be  proper  here  to  remark,  that  representations  having  been  made  to  the  Secretary  of  the 
Treasury,  and  to  this  office,  unfavorable  to  the  course  pursued  by  the  District  Attorney,  as  stated 
above,  in  entering  up  the  judgment  and  proceeding  under  the  execution  by  an  extent  of  the  real 
estate  conveyed  by  the  Warren  Association,  the  same  were  fully  examined  by  this  office,  not  only 
in  regard  to  their  correctness  in  a  legal  point  of  view,  but  to  their  expediency  and  tendency  to  pro- 
mote the  interests  and  best  secure  the  debt  of  the  United  States.  The  principal  grounds  on  which 
these  allegations  rest,  are,  that  the  United  States  should  have  proceeded  against  and  could  have 
recovered  from  the  individual  members  of  the  Warren  Association  the  amount  of  their  notes  ;  that 
the  real  estate  should  have  been  sold,  and  not  extended,  under  the  execution ;  that  the  appraise- 
ment under  the  execution  was  unfair,  if  not  fraudulent ;  and  that  the  agreement  made  by  the  Dis- 
trict Attorney  was  an  improper  compromise  of  the  rights  and  interests  of  the  United  States.  It  will 
be  perceived,  from  the  previous  part  of  this  report,  that  these  allegations  are  founded  on  error  as  to 
facts.  At  no  time  has  it  been  in  the  power  of  the  United  States  to  proceed  against  or  recover  from 
the  individual  members  of  the  Warren  Association  the  amount  of  their  notes.  These  notes  were 
negotiable  by  endorsement,  and  were  transferred  by  the  Commonwealth  Bank,  which  held  them,  to 
the  sureties,  previous  to  the  institution  of  the  suit  against  them.  They  were  handed  to  the  Mar- 
shal, on  the  express  condition  that  they  were  to  be  held  by  him  responsible  only  for  such  judgment 
as  might  be  recovered  by  the  United  States  against  the  surctits.  Until,  therefore,  there  was  a  judg- 
ment against  them  on  their  bond,  the  right  of  the  United  States  to  which  is  totally  denied  on  the 
grounds  before  stated,  no  proceedings  could  be  instituted  on  the  notes  of  the  Warren  Association. 
But,  further,  if  the  sureties  were  held  liable,  the  individual  members  of  the  Warren  Association 
denied  their  liability  on  the  notes,  for  the  reason,  also  before  stated,  of  their  illegal  execution  by 
unauthorized  officers.  Had  these  defences  failed,  and  judgments  been  ultimately  recovered  on  the 
notes,  the  defendants  would,  under  the  laws  of  Massachusetts,  be  entitled  to  have  their  real  prop- 
erty extended  in  the  very  mode  for  assenting  to  which  the  District  Attorney  is  complained  of,  unless 
sufficient  personal  property  could  have  been  found.  The  real  estate  was  extended,  instead  of  being 
sold,  because  in  no  other  manner  could  it  have  been  made  available  to  the  United  States.  It  was 
not  the  property  of  the  Commonwealth  Bank.  It  never  would  have  been  conveyed  to  them,  so  as 
to  be  liable  to  execution,  except  under  the  agreement  to  adopt  this  one  of  the  two  modes  allowed 
by  law.  To  have  done  otherwise  would  have  been  to  grant  to  the  plaintiff  better  terms  than  he 
could  have  gained,  had  he  succeeded  in  a  very  doubtful  and  complicated  legal  controversy.  There 
is  no  reason  to  believe  that  the  conduct  of  the  appraisers  was  unfair  or  fraudulent.  They  are  men 
stated  to  be  of  high  character  and  standing ;  well  acquainted  with  the  value  of  such  property ; 
totally  unconnected  with  any  of  the  parties  ;  their  selection  was  made  without  their  previous  knowl- 
edge ;  and  their  estimate  was  unanimously  adopted,  without  previous  concert.  Whether  the  value 
set  upon  the  land  be  too  high,  is  a  point  which  can  only  be  decided  by  ultimate  sales.  While,  on 
one  hand,  statements  have  been  made  to  this  office  to  that  effect,  on  the  other  there  have  been  nu- 
merous representations  of  a  contrary  character,  with  confident  assurances  that  the  result  will  be 
ultimately  a  complete  indemnity  to  the  United  States.  Reviewing  all  the  facts  of  the  case,  as 
they  have  come  to  my  knowledge  after  full  inquiry,  and  considering  the  very  doubtful  litigation  in 
which  the  United  States  would  have  been  involved,  not  merely  with  the  sureties,  but  with  the 
members  of  the  Warren  Association,  no  hesitation  existed,  or  does  exist,  on  my  part,  in  expressing 
approbation  of  the  course  taken,  as  that  which,  under  the  circumstances,  was  proper,  in  a  legal 
point  of  view,  and  decidedly  best  for  the  interests  and  ultimate  security  of  the  United  States. 

Taking  into  view,  however,  the  nature  of  the  allegations,  and  the  advantage  to  be  derived  from 
the  opinion  of  counsel  fully  acquainted  with  the  local  laws  and  mode  of  proceeding ;  considering, 
loo,  the  large  amount  that  still  remained  unsecured,  as  well  as  the  intricate  questions  involved  in 
the  pending  suit  on  the  bond  of  the  sureties  ;  the  professional  services  of  Rufus  Choate,  Esq.,  were, 
with  the  approbation  of  the  Secretary  of  the  Treasury,  retained  in  aid  of  the  District  Attorney  ;  and 
he  was  requested  to  investigate  and  report  fully,  to  this  office,  on  the  legality  and  expediency  of  the 
whole  previous  proceedings.  la  the  reply  of  Mr.  Choate,  he  expresses  his  decided  opinion  that  the 
course  pursued  by  the  District  Attorney  was  judicious  for  the  government,  and  entered  into  in  the 
purest  official  good  faith,  in  the  exercise  of  a  sound  discretion  ;  that  the  liability  of  the  stockholders 
for  the  notes  of  the  Warren  Association,  as  well  as  that  of  the  sureties  under  the  official  bond  held 
by  the  United  States,  were  questions  attended  with  great  difficulty ;  and  that  the  District  Attorney 
displayed  much  discretion  in  procuring  for  the  government  an  absolute  title  to  land,  in  lion  of  notes, 


57 

which  were  to  be  entirely  unavailing  until  judgment  should  be  recovered  against  the  sureties,  and 
only  to  the  extent  of  such  judgment.  He  also  confirms,  entirely,  the  legality  and  professional  as 
well  as  official  correctness  of  the  proceedings  upon  the  levy. 

In  regard  to  the  balance  due,  under  the  judgment,  of  $153,508  65,  exclusive  of  interest,  it  will  be 
seen  that  the  United  States  have  to  look  to  the  recovery  against  the  sureties  on  the  bond  of  14th 
February,  1837,  so  as  to  render  available  the  residue  of  the  notes  handed,  conditionally,  to  the 
Marshal,  and  which  amount  to  something  exceeding  $100,000  ;  to  the  proceeds  of  the  attachment 
and  judgment  in  the  suit  brought  in  February,  1838,  on  the  contract  of  the  Bank  ;  to  a  recovery  on 
the  two  official  bonds  of  John  K.  Simpson,  for  the  amount  of  the  pension  deposit,  and  to  such  sums 
as  may  be  recovered  out  of  the  assets  of  Simpson's  estate,  or  under  the  chancery  proceedings  insti- 
tuted against  the  debtors  of  the  Commonwealth  Bank.  In  all  these,  legal  proceedings  are  still 
pending.  The  foregoing  statement  affords  as  full  a  view  as  can  be  given  of  the  grounds  on  which 
ultimate  success  is  to  be  expected.  The  amount  of  security,  if  rendered  available,  is  certainly 
quite  sufficient  to  cover  the  balance.  A  proposition  has  lately  been  made,  on  behalf  of  the  Bank 
and  the  sureties,  to  settle  the  whole  balance  due  to  the  United  States,  by  the  payment  of  $107,632  58 
in  cash,  by  instalments,  all  falling  due  in  eighteen  months,  and  well  secured,  and  the  residue  by  a 
levy  on  real  estate  in  Boston,  to  be  set  off  by  appraisement  under  the  execution  laws  of  that  Dis- 
trict. The  acceptance  of  this  offer  is  recommended  both  by  the  District  Attorney  and  Mr.  Choate, 
in  general  terms ;  and  there  would  be  no  hesitation  in  agreeing  with  them  as  to  the  expediency  of 
so  doing,  if  the  whole  payment  had  been  proposed  in  well-secured  cash  instalments,  even  somewhat 
more  distant  than  those  now  offered ;  but  the  large  amount  of  real  estate  already  received  towards 
the  satisfaction  of  this  debt  makes  it,  in  my  opinion,  inexpedient  to  take  more,  if  there  is  a  reason- 
able prospect  of  securing  the  debt  in  any  other  way.  If,  as  is  alleged,  there  is  but  little  personal 
estate  of  the  Bank  that  can  be  made  available,  other  than  what  is  now  offered,  which  is,  besides, 
previously  pledged  for  the  indemnity  of  the  sureties,  the  question  of  expediency  must  chiefly  turn 
upon  the  prospect  of  a  recovery  from  the  sureties  in  the  suit  brought  on  their  bond  for  the  Bank, 
and  the  comparative  advantage  of  relying  upon  that  in  preference  to  the  present  offer. 

Under  these  circumstances,  and  before  giving  any  answer  to  the  proposition,  I  referred  it  again 
to  the  District  Attorney  and  Mr.  Choate,  for  fuller  information  on  these  points.  Their  reply  has  not 
yet  been  received. 

In  reply  to  the  inquiries  of  the  resolution  which  relate  to  the  Franklin  Bank,  I  have  to  say,  that, 
on  the  14th  of  August,  1837,  a  Treasury  transcript  of  the  settlement  of  the  account  of  that  institu- 
tion, showing  a  balance  due  to  the  United  States  of  $17,469  10,  together  with  a  copy  of  the  agree- 
ment with  the  Treasury  Department,  making  it  a  public  depository,  and  a  copy  of  the  official  bond, 
were  received  at  this  office,  and  forwarded  on  the  same  day  to  the  District  Attorney  of  Massachu- 
setts, by  direction  of  the  Secretary  of  the  Treasury,  that  he  might  obtain  payment  of  the  balance 
due  the  United  States,  or  ample  and  satisfactory  security,  which  it  was  believed  the  Bank  was 
ready  to  furnish.  The  District  Attorney  was  also  directed  to  give  this  matter  his  early  and  partic- 
ular attention,  and  report  the  result.  Promises  were  made  by  the  officers  of  the  Bank  to  settle  the 
balance  due,  and  additional  security  was  obtained  by  the  District  Attorney,  consisting  of  $4,478  in 
Bank  bills,  the  proceeds  of  which,  amounting  to  $4,468  75,  have  since  been  paid  into  the  Treasury, 
and  reduce  the  debt  to  $13,000  35,  exclusive  of  interest.  It  being  found  impossible  to  obtain  fur- 
ther payment,  suits  were  instituted,  in  January,  1838,  against  the  Bank  and  the  sureties  in  its  offi- 
cial bond.  These  suits  were  still  pending  at  the  last  return  of  the  District  Attorney,  a  continuance 
having  been  granted  by  the  court  on  the  application  of  the  defendants.  No  special  report  has  been 
received  from  that  officer  as  to  the  adequacy  of  the  security  in  the  official  bond,  or  as  to  the  pros- 
pect of  realizing  the  balance  still  due  from  the  assets  of  the  Bank.  The  amount,  however,  is  so 
small,  that  it  is  presumed  there  is  no  danger  of  its  not  being  recovered  from  one  or  other  of  the&e 
sources. 

In  reply  to  the  inquiries  of  the  resolution  which  relate  to  the  Lafayette  Bank,  I  have  to  say,  that 
no  account  against  that  institution  has  been  sent  to  this  office  for  suit,  nor  is  it  known  to  me  that 
anything  is  due  from  it  to  the  United  States. 

Very  respectfully,  yours, 

H.  D.  GILPIN,  Solicitor  of  the  Treasury. 

To  the  Hon.  LEVI  WOODBUJ^Y,  Secretary  of  the  Treasury, 

J. 

(tyinion  of  Messrs.  Mills  atid  Choate,  upon  the  liability  of  the  Sank  sureties. 

Boston,  February  — ,  1839. 
TV  the  Solicitor  of  the  Treasury. 

SIR, — We  have  examined  the  question  as  to  the  liability  of  the  sureties  of  the  Commonwealth 
Bank,  on  their  bond  dated  Feb.  14,  1837.  This  bond  has  the  signatures  and  private  seals  of  John 
K.  Simpson  as  President,  and  Charles  Hood  as  Cashier  of  the  Bank ;  but  as  the  bond  is  not  sealed 
with  the  seal  of  the  Corporation,  the  acts  of  the  President  and  Cashier  did  not  bind  the  Bank. 
Hall  J.  How  and  eight  others  executed  the  bond  as  sureties  for  the  performance  of  the  contract 
entered  into  by  the  Bank  on  the  15th  July,  1836.  There  are  some  expressions  in  the  bond  of  the 
llth  Feb.,  which  would  seem  to  extend  the  liabilities  of  the  sureties  to  "any  deposits  remaining 
with  the  said  Bank  at  any  time  prior  to  the  1st  day  of  Nov.,  1837."  But  it  is  very  clear  from  an 
3 


53 

examination  of  the  whole  instrument,  that  the  obligation  of  the  sureties  is  not  more  extensive  than 
that  of  the  Bank,  under  the  contract  of  the  loth  of  July.  By  that  contract  the  Bank  was  bound 
"to  discharge  all  the  duties  and  services  prescribed  by  the  act  of  the  23d  of  June,  1636."  On  the 
12th  day  of  May,  1837.  the  Commonwealth  Bank  "  refused  to  redeem  its  notes  on  demand  in  spe- 
cie," and  on  the  18th  of  the  same  month  the  Secretary  of  the  Treasury  notified  the  President  of 
the  Bank  that  that  institution  was  no  longer  a  depository  of  the  public  money.  For  any  deposits 
made  subsequent  to  the  18th  of  May,  the  Bank  would  be  liable  in  an  action  of  assumpsit  for  money 
had  and  received,  but  not  in  an  action  of  debt  on  the  contract.  And  if  the  Bank  is  not  liable  for 
such  deposits  in  an  action  founded  on  the  contract,  the  sureties  are  not.  In  this  view  of  the  case,  it  is 
necessary  to  inquire  what  was  the  amount  of  public  money  on  deposit  in  the  Bank,  on  the  18th  day 
of  May,  and  how  much  of  that  sum  remained  unpaid  at  the  time  the  actions  were  commenced 
against  the  sureties.  From  the  books  of  the  Bank,  it  appears  that  the  amount  of  deposits,  standing 
to  the  credit  of  the  Treasurer  of  the  United  States,  and  receiving  and  disbursing  officers,  on  the  18th 
May,  1837,  was  8697,497  90.  The  balance  remaining  due  of  these  deposits,  at  the  time  the  actions 
were  commenced  against  the  sureties,  in  January,  1838,  was  $106,640.  For  this  sum  the  sureties 
were  liable,  but  for  nothing  further.  The  sum  of  8166,437  90  has  been  paid  on  the  execution 
issued  against  the  Bank,  and  for  which  the  sureties  are  to  have  the  benefit,  if  a  judgment  is  recov- 
ered against  them.  In  addition  to  this,  the  Bank  now  proposes  to  pay,  or  secure  to  be  paid,  in 
cash,  8 107,000.  If  we  are  correct  in  the  view  we  have  taken  of  the  subject,  it  is  manifest  that 
nothing  is  to  be  gained  by  further  prosecuting  the  actions  against  the  sureties. 

We  are,  &c., 

(Signed,)  JOHN  MILLS,  District  Attorney. 

R.  CHOATE. 

K. 

William  Wright  to  Mr.  Gilpin. 

Boston,  July  22,  1839. 

Sm, — In  your  official  statement  of  the  compromise  made  with  the  Warren  Association,  you  have 
spoken  of  Mr.  Choate,  and  have  alluded  to  other  persons  whose  names  were  not  given,  as  the 
source  of  information  relied  upon  in  giving  the  transaction  your  official  sanction.  As  I  have 
an  interest  in  knowing  who  those  other  persons  were,  I  must  request  of  you  the  information. 

Probably,  those  friends  of  the  administration,  most  favorably  known  at  Washington,  were  looked 
to  as  the  most  suitable  source  of  inquiry;  such,  if  you  please,  as  Mr.  Parmenter,  of  Congress, 
Mr.  Bancroft,  the  Collector,  and  perhaps  Judge  Morton. 

If  those  individuals,  or  either  of  them,  were  consulted,  and  spoke  of  this  transaction  in  terms  of 
approbation,  I  should  be  glad  to  know  it.  I  should  be  glad,  also,  to  know  whether  they  referred 
you  for  information  to  other  persons,  and  who  such  other  persons  were.  In  fact,  I  am  desirous  of 
having  the  names  of  all  who  have  given  favorable  accounts  of  this  affair,  designating  those 
whose  statements  were  in  reply  to  your  solicitations,  from  those  whose  statements  were  merely 
voluntary. 

The  favor  of  this  information  I  think  I  have  a  right  to  ask  and  to  expect — inasmuch  as  the 
representations  which  I  had  previously  made  concerning  the  matter  have  been  discredited  and  set 
down  as  false,  in  consequence  of  the  contradictory  accounts  received  from  the  persons  thus  alluded 
to  in  your  report. 

With  much  respect,  your  obedient  servant, 

WILLIAM  WRIGHT. 
To  HON.  HENRY  D.  GILPIN", 

Solicitor  of  the  Treasury* 


Report  of  Mr.  Solicitor  Birchard,  to  Congress,  May,  1840. 

Office  of  the  Solicitor  of  the  Treasury,  May  25,  1840. 

SIR, — I  received  on  the  16th  instant  the  letter  of  the  Hon.  William  Key  Bond,  chairman  of  the 
Select  Committee  of  the  House  of  Representatives,  addressed  to  you,  under  date  of  the  13th  instant, 
and  enclosing  a  copy  of  the  memorial  of  William  Wright,  and  the  following  resolution  of  the  Select 
Committee,  to  wit : 

Resolved,  That  the  chairman  be  directed  to  ask  the  Secretary  of  the  Treasury  to  furnish  the 
Committee  with  the  following  information,  viz. : 

1.  With  copies  of  all  contracts  made  with  the  Commonwealth  Bank  at  Boston,  for  the  deposit  of 
the  public  money  in  the  same,  and  of  all  bonds  and  other  securities  taken  by  the  Department  for 
the  safe  keeping  and  repayment  of  the  public  money. 

2.  Copies  of  all  contracts  at  any  time  made  by  the  Department,  or  any  of  its  agents,  by  which 
additional  security  was  obtained  for  the  sums  due  from  said  Banks,  or  any  portion  of  them,  and  of 
all  papers  relating  to  such  contracts. 

3.  Copies  of  all  correspondence  of  the  Department  with  its  agents  or  others,  and  of  all  other 
papers  relative  to  the  compromise  by  which  certain  real  estate,  in  South  Boston,  was  taken  in  satis- 
faction of  a  large  portion  of  the  claim  of  the  government  against  said  Banks, 


4.  That  the  chairman  also  request  the  said  Secretary  to  furnish  the  Committee  with  copies  of 
any  other  papers  on  file  in  his  Department,  and  with  any  other  information  in  his  possession;  show- 
ing the  terms  and  character  of  the  aforesaid  compromise. 

A  true  copy. 

Attest:     WILLIAM  KEY  BOND,  Chairman. 

In  compliance  with  the  request  of  the  chairman  of  the  Committee  "for  any  explanation  or  sug- 
gestion which  may  be  thought  pertinent  to  the  subject,"  and  for  copies  of  all  the  papers  indicated 
by  the  resolution,  and  in  obedience  to  your  requisition,  I  immediately  directed  all  the  clerks  in  my 
office,  with  the  exception  of  Mr.  Harpar,  to  commence  preparing  the  copies  called  for,  and  thus 
employed  them  continuously  until  Friday  last,  before  the  copying  was  completed.  Too  much  time 
was  necessarily  employed  in  comparing  their  work,  to  enable  me  to  transmit  the  papers  during  the 
succeeding  day. 

I  have  now  the  honor  to  submit  the  same,  (a  list  whereof  is  annexed.)  which,  so  far  as  my 
knowledge  extends,  contain  all  the  information  that  the  records  or  files  oi'  this  office  can  now,  or 
could  at  any  time  heretofore,  furnish,  throwing  any  light  upon  the  transaction,  or  in  any  way 
capable  of  aiding  the  Special  Committee  in  their  investigation. 

It  seems  to  me  that  the  very  full  report  of  my  predecessor,  dated  January  25,  1839,  will  super- 
sede the  necessity  of  any  extended  remarks  from  me.  It  may  be  pertinent,  however,  to  the  subject, 
to  state,  that  I  do  not  regard  the  proceeding  in  the  light  of  a  compromise. 

Had  the  United  States  succeeded  in  obtaining  a  judgment  against  the  Warren  Association,  and 
put  forth  its  execution  and  caused  a  levy  to  be  made  upon  its  real  estate,  I  apprehend  that  the 
laws  of  the  Slate  would  have  forced  government  to  take  it  at  the  appraised  value  ;  for  government 
would  then  have  stood,  in  relation  to  the  demand  against  the  Warren  Association,  in  no  better  con- 
dition than  the  Commonwealth  Bank  would,  and  could  have  enjoyed  no  greater  privileges.  If  the 
Association  could  have  compelled  the  Bank  to  extend  its  writ  upon  real  estate,  (of  which  I  have  no 
doubt,)  they  could  also  have  required  the  United  States  to  pursue  the  same  course,  whenever  as 
creditors  of  the  Bank  judgment  should  be  rendered  in  their  favor. 

Supposing  it  then  to  have  been  necessary  to  resort  to  this  means  of  securing  the  debt,  which  I 
think  is  abundantly  shown  by  the  evidence  herewith  transmitted,  and  it  will  follow  that  the  com- 
promise amounts,  in  substance,  to  the  same  thing,  precisely,  which,  under  the  most  favorable 
result,  would  have  been  produced  by  prosecuting  a  suit  as  creditor  of  the  Bank  against  the  Asso- 
ciation. If  it  would  have  been  legal  to  subject  the  land  in  due  course  of  law,  at  the  termination 
of  a  long  and  difficult  litigation,  to  payment  of  the  debt  of  the  United  States,  I  am  at  a  loss  to  con- 
jecture a  reason  why  it  would  be  unlawful  to  do  the  same  thing  in  a  more  summary  and  amicable 
way. 

I  have  not  seen  evidence  of  fraud  or  official  misconduct  on  the  part  of  any  of  the  law  officers  of 
the  government.  My  predecessor's  letters  and  the  report  of  Mr.  Mills  will,  however,  speak  for 
themselves,  in  connection  with  the  papers.  The  latter  was  fully  justified  by  the  report  of  the  Hon. 
Unfits  Choate,  and,  though  furnished  by  me  with  a  copy  of  the  memorial,  signified  in  the  enclosed 
letter  his  willingness  to  rely  upon  his  former  explanation  in  answer  to  similar  accusations.  In 
adjusting  a  claim  of  this  magnitude,  it  was  necessary  to  incur  great  responsibility,  and  had  the 
District  Attorney  refused  to  do  it,  and  lost  thereby  the  chance  of  saving  anything  from  the  debt  of 
the  Warren  Association,  he  would  have  been  justly  censurable,  and  could  not  have  escaped  blame. 
Whereas,  if  he  could  get  a  fair  appraisal,  which,  with  the  precaution  taken,  he  had  a  right  to  expect, 
no  one  would  have  doubted  the  propriety  of  his  course  under  the  embarrassing  state  of  the  debt  and 
the  doubtful  contingencies  that  clouded  the  prospect  of  eventual  recovery.  The  Bank  was  known 
to  be  hopelessly  insolvent.  The  bond  given  as  security,  certainly  covered  but  a  small  portion  of 
the  debt  due  to  the  government ;  and  if,  as  was  strongly  presented  in  the  grounds  of  defence  taken 
by  the  sureties,  and  set  forth  at  large  in  their  several  special  pleas,  the  bond  itself  was  not  such  a 
contract  as  could  be  enforced  by  the  laws  of  Massachusetts  against  the  Bank  itself,  the  sureties 
were  entirely  discharged  from  all  liability  whatever.  These  were  considerations  which  third  par- 
ties might  well  overlook.  I  am  not  surprised  that  Mr.  Wright  overlooked  them,  yet  it  would  have 
been  unpardonable  in  the  District  Attorney  if  he  had  omitted  to  take  them  into  consideration.  It 
would  have  been  equally  unpardonable  had  he  omitted  to  anticipate  the  possibility  that,  in  the 
event  of  a  recovery  against  the  private  Association,  which,  from  the  nature  of  the  controversy,  he 
could  not  expect  would  be  had  in  a  short  time,  he  might  find  all  the  personal  effects  of  the  mem- 
bers placed  beyond  the  reach  of  the  law,  or  even  the  debt  itself  satisfied  by  arrangement  with  the 
Bank  before  he  could  take  the  means  of  securing  it.  It  was  negotiable  paper,  and  it  had,  in  fact, 
been  already  negotiated  by  being  pledged  to  the  bondsmen.  A  reasonable  exercise  of  the  usual 
ingenuity  of  bankers  would  have  soon  placed  it  beyond  the  ordinary  vigilance  of  the  law,  if  those 
interested  had  felt  so  disposed. 

Viewed  fairly,  and  it  seems  to  me  that  the  whole  of  the  complaint  finally  resolves  itself  into  this  : 
was  the  land  appraised  too  high  ?  On  this  point  there  arc  various  opinions.  Some  have  said  it 
was  not  worth  one  fourth  of  the  sum  at  which  it  was  appraised,  and  never  will  be.  Others  put  it 
at  a  half;  some  at  ten,  others  twelve,  others  at  fifteen  cents  per  foot,  the  price  at  which  the 
appraisers  set  it  over  to  the  United  States.  Some  have  valued  it  higher  than  the  appraisal.  Since 
I  came  into  office,  I  have  made  inquiries  of  every  one  that  1  have  met  who  knew,  or  professed  to 
know,  anything  about  its  value,  and  no  two  have  yet  been  found  who  agreed.  The  answers  given 
to  my  inquiries,  the  general  description  of  the  property  which  I  have,  the  state  of  the  money  market, 
and  the  gradual  reduction  of  the  prices  of  land  consequent  upon  the  reduction  of  the  circulating 


UCSB   LIBRARY 


60 

medium,  have  fixed  upon  my  mind  a  strong  belief  that  the  amount  of  $160,000  could  not  now  by 
any  means  be  realized  from  its  sale.  Every  one  with  whom  I  have  conversed,  has  advised  against 
bringing  it  into  market  at  present.  I  have  been  assured  that  the  best  real  estate  in  Boston,  if  put 
into  market  in  large  quantities,  would  not  now  command,  in  cash,  the  half  of  what  was  considered 
its  cash  value  two  years  since.  The  fairness  or  unfairness  of  the  appraisal  may  in  one  sense  be  set 
down  as  a  problem,  which  time  alone  can  solve  with  any  approach  to  certainty.  It  may  turn  out 
like  the  real  estate  made  over  to  the  United  States  by  the  late  Edward  Livingston,  which,  after  the 
lapse  of  four  years  only,  overpaid  the  principal  and  interest  of  a  debt  of  over  $40,000,  although  in 
the  mean  time  it  was  considered  as  a  totally  desperate  debt ;  or,  like  the  lands  of  the  late  Edmund 
Randolph,  which  were  considered  of  no  great  value  when  taken  by  the  United  States,  but  which,  in 
a  few  years  after,  overpaid  the  whole  debt  and  interest,  amounting  to  over  $53,000  principal.  Cer- 
tainly the  location  of  the  property  at  South  Boston  is  such  as  to  make  such  a  supposition  by  no 
means  improbable.  Be  this,  however,  as  it  may,  be  the  appraisal  too  high  or  too  low,  I  can  yet  see 
no  way  in  which  the  officers  of  the  United  States  could  have  taken  greater  precautions  to  secure  a 
lair  appraisal ;  and  if  there  has  been  any  fraud  in  the  transaction,  it  must  have  been  perpetrated,  as 
the  District  Attorney  states  in  his  report,  by  the  deliberate  perjury  of  Messrs.  Gurney,  Merrill  and 
Binney,  the  appraisers, — men  whose  character  I  have  understood  to  be  above  suspicion.  A  differ- 
ence of  opinion  about  the  value  of  a  piece  of  property,  in  a  city  of  the  size  of  Boston,  is  but  poor 
matter  of  evidence  to  sustain  any  such  imputation,  or,  in  fact,  any  imputation  touching  the  integrity 
of  men  of  fair  character. 

In  conclusion,  I  feel  myself  constrained  to  say,  after  the  most  careful  examination  of  the  whole 
correspondence,  that  the  course  of  proceedings  adopted  by  the  law  officers  of  the  government, 
(though  attended  with  great  and  serious  responsibility,  from  which  they  did  not  shrink,)  was  strictly 
justifiable  in  a  legal  point  of  view,  and  that  I  cannot  find  in  the  evidence  anything  whatever  to  sus- 
tain the  charge  that  their  motives  were  incorrect,  or  that  there  has  been  in  any  step  taken  by  them 
any  official  impropriety,  much  less  the  slightest  ground  for  charging  them  with  fraud. 

Very  respectfully,  yours, 
(Signed,)        M.  BIRCHARD,  Solicitor  of  the  Treasury. 

HON.  LEVI  WOODBURY,  Secretary  of  the  Treasury. 


Note  referred  to  Oil  page  15* 

The  origin  and  proof  of  the  $42,000  checks 

Washington,  Treasury  Department,  March  11,  1844 

DEAR  SIR,— By  reference  to  the  Treasurer's  office,  it  appears  that  on  the  4th  of  December,  1837, 
a  draft  for  $42,000  on  the  Commonwealth  Bank  of  Boston,  with  f  8,000  in  Treasury  notes,  was 
sent  you  from  that  office,  accompanied  with  the  usual  printed  letter,  and  receipts  for  the  draft  and 
notes.  The  receipts  signed  by  you  are  on  file,  but  a  copy  of  the  letter  was  not  preserved,  it  not 
being  the  practice  to  keep  copies  of  such  letters.  Your  letter  of  the  9th  December,  1837,  acknowl* 
edging  the  receipt  of  the  draft  and  Treasury  notes,  is  on  file  in  this  department. 

With  high  regard  and  respect, 

Your  obedient  servant, 

J.  C.  SPENCER. 
HON.  DAVJD  HEitsnAW,  Boston, 


